Deloitte blow as court lifts gag

ACCOUNTANCY giant Deloitte & Touche has lost a landmark High Court battle to stop a series of damaging allegations laid against it and its UK chairman being made public.

A judge has lifted an injunction preventing the profession's voluntary Joint Disciplinary Scheme (JDS) and trade magazine Accountancy Age from publishing claims about the group's work with former casinos operator Capital Corporation.

The JDS today published a Press notice it had hoped to release before Deloitte won a gagging order in February that many saw as a significant breach of the spirit of the scheme. It will now set up a tribunal to listen to complaints emerging from an investigation that began in 1999.

JDS executive counsel Chris Dixon said: 'This is a very important decision, a good day for Press freedom and public interest. We can now go ahead and put out our notice as we have done in every other case.

'Public confidence in the profession depends on the public knowing what is happening. The only way for them to be informed is by opening, for example, the Evening Standard and reading about it.'

Dixon wants the tribunal to investigate claims Deloitte acquiesced in allowing Capital to make misleadinga mendments to disclosures in draft interim results nine years ago. It also believes Deloitte should have resigned at the time because it was 'unable to form a view on whether or not Capital's interim accounts were materially correct'.

Dixon claims UK chairman Martin Scicluna failed to report a former partner, Stephen Ives, after allegations he bought a Land Rover from Capital's boss, only to deduct most of the sum from his fees.

Deloitte today insisted it saw nothing wrong with pushing for the injunction. It said: 'After a five-year JDS investigation, no complaint has been laid in respect of the audits of the financial statements of Capital Corporation. We therefore objected to having unsubstantiated and groundless allegations aired in public before even the commencement of the tribunal process.'

Capital owned a number of London casinos including Crockfords, the Colony Club and the Cromwell Mint. Bought by Stanley Leisure in a near-£90m deal six years ago, it is best-remembered for a series of high-profile stories relating to a lack of internal controls and possible fraud over food and fine wine orders in 1996-97.

It blamed chairman Kenneth Thompson and finance chief Desmond Periera, who were sued after resigning in May 1997 over the way the company was being run. Both were cleared in 1999 and Stanley issued a full apology.