Comet administrator Deloitte faces £1m fine

Comet Deloitte administration fine
Deloitte charged Comet at least £15m in fees in its roles as administrator and then liquidator
// Comet administrator Deloitte has been hit with a £1m fine
// The firm and two of its partners have agreed to pay the fine
// Comet fell into administration in the run-up to the Christmas trading period in 2012

The administrators to Comet, Deloitte, has reportedly been hit with a fine of £1 million by the accountancy watchdog.

The Big 4 accountancy firm and two of its partners who oversaw Comet’s administration in 2012, have agreed to pay the fine, Sky News reported.

They will also be given formal reprimands by the Institute of Chartered Accountants in England and Wales (ICAEW), although the two partners – believed to be Neville Kahn and Christopher Farrington – will not be banned.

The ICAEW, which can sanction accountants, reportedly found that Deloitte did not take adequate steps to ensure that its previous work advising Comet’s owners did not present a conflict of interest.

“The admissions within this settlement conclude our long-running investigation into the conduct of the insolvency practitioners who accepted appointments to act as the administrators of Comet in 2012,” the ICAEW said in a statement.

“Following the opening of this investigation, we conducted a thematic review of engagement acceptance procedures in the larger firms engaged in major insolvency appointments.

“This led, in 2016, to Deloitte making changes to improve its processes on insolvency appointments, which, if followed, should significantly reduce the likelihood of a similar issue happening again in the future.

“This case should send a strong message to insolvency practitioners and their firms of the importance of demonstrating the highest standards and putting in place appropriate and robust processes to ensure compliance with Codes of Conduct.

“We will not hesitate to investigate and take robust action where we consider there is evidence of conduct falling short of that which is expected of our members and member firms.”

Comet, the electrical goods retailer, fell into administration in the run-up to the Christmas trading period in 2012.

It closed the last of its stores in December of 2012, leaving debts of over £230 million to unsecured creditors, including the HMRC, unpaid.

Its demise cost more than 6000 jobs, and became one of the biggest high street casualties of the decade – alongside the likes of BHS, Toys R Us UK and Maplin.

At the time, Deloitte charged at least £15 million in fees in its roles as administrator and then liquidator.

Deloitte has also agreed to pay the ICAEW’s costs of nearly £1 million in addition to the fine.

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