Chris Blackhurst: The case that underlines need for insolvency ombudsman
Time for change: The government should install an insolvency ombudsman that creditors can turn to for impartial assessment (Picture: John Stillwell, PA)
On Wind Hellas, the creditors could not see how Ernst & Young could take both appointments without compromising their integrity. Six-and-a-half years later, the professional body has at last agreed with them.
The ICA has found that Mills and Ernst & Young failed to disclose “to its prospective client... that neither she, nor any other Ernst & Young insolvency practitioner, could accept any subsequent formal insolvency appointment [in relation to Wind Hellas]…”
Unpacked, this is a reference to the closed doors of the “insolvency club” I've been writing about. From the point of view of the victims of this conduct, sanctions more than six years later are too late. The fines and admonishment are of no benefit to them.
Business news in pictures - June 17
1/3
Still, it’s a hefty strike against Ernst & Young. Mills is top of the tree and for her to be penalised at all has sent eyebrows skywards. It shows we need an insolvency ombudsman to whom creditors can turn for an immediate impartial assessment of whether the insolvency club is overstepping the mark.
I called for the next Commons Business, Innovation and Skills Select Committee to consider installing somebody who understands what is acceptable but also knows abuse when they see it.
The need is real — the six-year journey to the Wind Hellas sanctions highlights as much.
