Accountancy giant KPMG has been slapped with a fine of £13m by an independent tribunal over serious misconduct in its role in the sale of Lancashire-headquartered bed maker Silentnight.
The firm has been reprimanded by the Financial Reporting Council over the deal in 2011 which saw the manufacturer acquired by a private equity fund.
One of its former partners, David-Costley Wood, has also been £500,000 while KPMG has been ordered to conduct an independent “root cause” review.
KPMG was advising on the sale of Silentnight to HIG Capital ten years ago through a pre-pack administration.
The independent tribunal which examined the case ruled that KPMG’s involvement with Silentnight was “deeply troubling” as it failed to act solely in its client’s interests.
It added that the firm in fact acted in the interests of a party whose interests were “diametrically opposed” to those of Silentnight.
KPMG has also been ordered to pay £2.75m in costs.
A spokesperson for KPMG UK said: “We acknowledge the tribunal’s findings and regret that the professional standards we expect of our partners and colleagues were not met in this case.
“Mr David Costley-Wood has retired from the firm and whilst we no longer provide insolvency services, our broader controls and processes have evolved significantly since this work was performed over a decade ago.
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“As a firm, we are committed to the highest standards and continually invest in our people and procedures to ensure potential conflicts of interest are identified and managed effectively.
“We welcome the additional review process outlined by the FRC and remain focused on building trust and delivering work of the highest quality.”
A spokesman for the tribunal added: “Breaches of the principles of integrity and objectivity risk seriously undermining public confidence in the standard of conduct of members and member firms and in the profession generally, all the more so where, as here, the professional has acted dishonestly.
“Dishonesty is inimical to everything that a profession stands for and especially destructive of public confidence.
“The standards of integrity and objectivity are of fundamental importance. They express the most basic requirements that society expects of professional accountants.
“Members of the profession have a privileged and trusted role in society. In return, they are required to live up to their own professional standards.
“Society expects high standards from professional persons; and the professions expect high standards from their own members.”