PracticeAccounting FirmsKPMG criticised for conflict of interest

KPMG criticised for conflict of interest

Big four firm KPMG has been criticised for conflict of interest by a High Court judge during a petition to wind up Colt Telecom by stakeholder, US venture fund Highberry.

Link: KPMG UK results disappoint

Acting for Highberry, KPMG insolvency partner Richard Heis prepared a report, suggesting that Colt was likely to fail. This advice contradicted a tax advice report by KPMG for Colt earlier this year, which had reached a different conclusion.

Mr Justice Jacob rejected Highberry’s petition, saying it did not hold ‘any substance’ and ‘should never have been launched’.

‘I regret to say that I conclude, without hesitation however, that Mr Heis failed in his duties to the court. Unconsciously, I think he espoused his clients’ cause. Moreover, I think he was prepared to act for Highberry when there was a clear conflict between his firm and that of a client, namely Colt,’ said the judge.

KPMG confirmed it performed tax advice services for Colt, but said it was not related to the case.

‘KPMG UK believes it was open and transparent from the start in the content and evidence of the petition submitted to the court and the conclusions the report drew,’ a KPMG spokesman said. ‘We note the judges comment and are considering it at the moment.’

The court decision left Highberry to pick up the court bill of its action of some £1m.

Related Articles

Sexual harassment – is accountancy next for #MeToo?

Accounting Firms Sexual harassment – is accountancy next for #MeToo?

2d Karen Baxter, Lewis Silkin
Johnston Carmichael CEO appointed as ICAS president

Accounting Firms Johnston Carmichael CEO appointed as ICAS president

4w Emma Smith, Managing Editor
British Accountancy Awards 2018 – entries open!

Accounting Firms British Accountancy Awards 2018 – entries open!

1m Emma Smith, Managing Editor
Is the accountancy sector facing an international talent crisis?

Accounting Firms Is the accountancy sector facing an international talent crisis?

1m Lewis Silkin
RSM appoints new Chief Operating Officer

Accounting Firms RSM appoints new Chief Operating Officer

2m Alia Shoaib, Reporter
RSM announces 11 partner promotions

Accounting Firms RSM announces 11 partner promotions

2m Emma Smith, Managing Editor
BDO hires former AstraZeneca creative director as head of digital and innovation

Accounting Firms BDO hires former AstraZeneca creative director as head of digital and innovation

2m Emma Smith, Managing Editor
What does the future hold for listed accountancy firms?

Accounting Firms What does the future hold for listed accountancy firms?

2m Fergus Payne, Lewis Silkin