Deloitte responds to JDS complaints

Deloitte has responded to today’s JDS complaints against the firm and its chairman, Martin Scicluna, and claimed that an independent tribunal hearing ‘will not uphold the complaints’.

Link: Scicluna worried for reputation

The complaints were issued by Chris Dickson, executive counsel of the JDS, this morning after a High Court ruling lifted a temporary injunction which was preventing their publication. The complaints were based on matters relating to work carried out on the audit of casino company, Capital Corporation.

‘After a five-year JDS investigation, no complaint has been laid in respect of the audits of the financial statements of Capital Corporation,’ a Deloitte statement said. ‘We therefore objected to having unsubstantiated and groundless allegations aired in public before even the commencement of the tribunal process.’

Martin Scicluna, the UK chairman of the board of partners, has had a complaint laid against him by Dickson for ‘failing to report’ Stephen Ives, a former Deloitte audit partner who worked on the Capital account, to the ICAEW. He has also laid complaints against the firm itself, which will now be investigated by an independent tribunal.

Ives was excluded from membership of the ICAEW and ordered to pay £87,000 costs by the JDS last November for ‘fraud’. The JDS found Ives had ‘fraudulently obtained’ a Range Rover from Capital Corporation, which owned the famous high-rolling Mayfair casino Crockfords. Capital was sold to Stanley Leisure in 1999 following a protracted bidding battle.

Along with the complaint against Scicluna, a separate complaint has been laid against Deloitte as a firm for ‘failing to resign as auditor of Capital’ at the time of Capital’s 1996 interim announcement.

In a third complaint laid down by the JDS and to be investigated by the independent tribunal, Deloitte was charged with ‘acquiescing in Capital’s misleading amendments to the disclosures D&T had recommended that Capital make to the market’.

‘In respect of Capital’s 1996 interim announcement, we reject totally the statement that the announcement included misleading statements. It would have been inappropriate to resign as auditors, and our decision to continue was consistent with Auditing Standards,’ the statement said.

‘The firm carried out a thorough review of the position of Stephen Edward Ives, did conclude he should retire from the firm, but based upon information available at that time, did not conclude that it was appropriate to report Ives to the Institute of Chartered Accountants in England and Wales,’ said Deloitte.

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