Deloitte & Touche has been fined £14 million and one of its partners suspended after a tribunal ruled the accountants had shown a “deliberate disregard” for professional ethics in its handling of the sale of carmaker MG Rover.
The Financial Reporting Council said it has issued a "severe reprimand" to Deloitte.
The FRC's tribunal dismissed an appeal by Deloitte against an earlier ruling and said the firm had failed to manage the conflicts of interest created by its role as the advisers to MG Rover and the 'Phoenix Four' directors that bought the business out of administration.
The tribunal imposed a fine of £14m on the company and on former corporate finance partner Maghsoud Einollahi of £250,000. Einollahi, who was involved in the deal, has also been excluded from the profession for three years.
The tribunal said Deloitte’s conduct had “showed in some instances a persistent and deliberate disregard of the fundamental principles and statements of the ICAEW’s code of ethics.
Paul George, FRC executive director conduct, said: "The final report of the tribunal provides a clear analysis of the case and how it reached its conclusions.
"It should be essential reading for all members of the profession.
"The sanctions imposed are in line with the FRC’s aim to ensure penalties are proportionate and have the necessary deterrent effect to prevent misconduct and bolster public and market confidence.”
MG Rover collapsed in 2005 with the loss of 6,000 jobs and debts of £1.4 billion, having been bought five years earlier from BMW for £10 by businessmen Peter Beale, Nick Stephenson, John Towers and John Edwards, known as the 'Phoenix Four'.
They were struck off as company directors for a combined 19 years in 2011, having shared £42m in pay and pensions after buying the company in 2000.
Deloitte acted as adviser to MG Rover on its administration, but also acted corporate advisers to the buyout group.
A Deloitte spokesperson said: "We remain disappointed with the outcome of the tribunal and disagree with its main conclusions. As a firm we take our public interest obligations seriously in everything we do. We are disappointed that the efforts we and others made did not successfully secure the long term future of the MG Rover Group.
"The quality of our work, carried out more than ten years ago, has not been criticised, but the tribunal found against us on a number of points."
BMW sold MG Rover Group in May 2000 to Techtronic for £10, with BMW also providing a £427m dowry, essentially a long-term interest-free loan, to Techtronic and paying £75m in lieu of providing warranties to the business.
The Phoenix Four each owned and invested £60,000 in Techtronic.
The four said their stewardship of the group would be for the public good. Phoenix Venture Holdings, the consortium formed by the four businessmen, later acquired all the shares of Techtronic which ultimately became the parent company of MG Rover Group.
MG Rover Group entered administration on April 8, 2005 with estimated losses of nearly £1bn and about 6,500 staff redundancies.
> Read the tribunal's report.