Tuesday, February 2, 1999 Published at 18:42 GMT
Business: The Company File
Record fine for Maxwell accountants
Robert Maxwell's companies lost millions for their pensioners
The accountancy firm PricewaterhouseCoopers has received a record fine by the profession for shortcomings in auditing the accounts of the late Robert Maxwell's group of companies.
It is the largest fine ever levied under the accountancy profession's Joint Disciplinary Tribunal.
Senior partner Peter Smith said their failings were a matter of deep regret:
"We accept that we fell short of the very high standards we set ourselves. As soon as it became clear what had happened, we said the first priority for everyone must be the welfare and long-term security of the pensioners."
After the death of Mr Maxwell, who owned the Mirror Group newspaper, it emerged that pension funds intended for former staff had been invested in other Maxwell companies to try to prop up their share price.
The Maxwell empire collapsed in 1991 leaving its pension funds £400m in deficit.
Coopers & Lybrand, now merged with Price Waterhouse, was a long-term adviser to Mr Maxwell. The firm acted as auditors of nearly all the Maxwell-controlled companies and their pension funds from 1972 onwards.
Firm 'lost the plot'
The long-awaited report from the tribunal said Coopers & Lybrand had "lost the plot."
It said the firm had failed to consider whether there was "evidence of fraud, other irregularities, defaults or unlawful acts" at Mr Maxwell's businesses that would merit "whistleblowing" to the proper authorities.
"The complaints reveal shortcomings in both vigilance and diligence and a failure to achieve an appropriate degree of objectivity and scepticism, which might have led to an earlier recognition and exposure of the reality of what was occurring," it added.
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