Big Five - KPMG: Jefri case will cramp firms
KPMG has lost the last round of its legal battle with Prince Jefri of Brunei over the adequacy of its Chinese walls, prompting fears that the Big Five could face limits on the amount of investigative work they can accept.
Former KPMG partner, Ted Baskerville, now managing director of forensic accountants Buchler Phillips Lindquist Avey, said: ‘As a result of the Prince Jefri case, clients will want to ensure their advisers are genuinely free of any conflict of interest before giving instructions.
‘At the same time, the Big Five may have to face up to the fact there is a limit to what cases they can accept.’
The House of Lords last week granted an injunction to former KPMG client Prince Jefri banning the firm from investigating the financial affairs of the Brunei Investment Agency during the time he was its chairman.
The decision has wide implications for professional service firms, raising questions over their ability to take on work where there is a conflict of interests, and on the effectiveness of Chinese walls. KPMG said it was greatly disappointed with the verdict.
Other Big Five firms refused to comment until they had seen the Lords’ detailed reasons.