The ghost of Robert Maxwell came back to haunt Coopers & Lybrand this week, after the profession’s senior watchdog confirmed it would bring a series of complaints against the firm and four of its partners involved in auditing the media mogul’s empire in the early 1990s.
The decision is a serious embarrassment to Coopers, which will hear the accusations put by the executive council of the Joint Disciplinary Scheme at a tribunal in early autumn.
Coopers said it had been aware for some time the case might be referred to a tribunal. ‘We will be co-operating fully,’ said a spokeswoman.
JDS head Chris Dickson said an investigation led council to believe there were grounds for a tribunal to make an ‘adverse finding’. He refused to say which Coopers partners had been charged.
The complaints centre on the 1990 audit of Maxwell’s main companies.
At the time, Maxwell was attempting to disguise the financial collapse of his empire using a series of ‘loans’ from the pension funds of the Mirror Group, which he bought in 1984, and a publicly quoted investment trust company called First Tokyo Index Trust.
Bishopsgate Investment Management and London & Bishopsgate International Investment Management were the main vehicles he used to invest the pension and trust funds to prop up shares in his listed company Maxwell Communications Corporation.
Maxwell was also preparing the accounts of the Mirror Group Newspapers prior to its flotation in 1991.
The Coopers partners will be told they should have noted evidence of fraud, irregularities, defaults or unlawful acts which would have obliged them to report to relevant authorities.
The central figure in the audit of Maxwell’s main companies was John Walsh, who audited them and Maxwell’s private company from 1970. He died shortly after the trial of Kevin and Ian Maxwell in 1996. Under JDS rules the complaints against him were dropped.
Coopers is still defending an action brought by the liquidator of Maxwell Communications, Grant Thornton.
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