Mazars hit with £2m penalty for pensions transfer failings

Mazars has been ordered to pay a £750,000 fine and £1.12m in costs after the Financial Reporting Council found a series of failings in relation to advice it gave to trustees of a defined benefit pension scheme.

The FRC found Mazars overstated the case for a change of sponsorship of the DB scheme of First Quench, a subsidiary of off-licence Threshers in relation to a transfer by one if its sponsors, specialist insurer Pensions Corporation. Mazars was found to have allowed its “judgement to be overridden by the commercial interests of Pension Corporation” and sharing confidential information with Pension Corporation.

The firm was given a severe reprimand, as was partner Richard Karmel who also received a £50,000 fine and an order to pay £80,000 costs.

FRC executive director of conduct Paul George says: “This outcome sends a clear message to all accountants and accountancy firms carrying out advisory work that not only do they have a responsibility to carry out their professional work diligently and in accordance with the applicable technical standards but that they must consider the different and opposing commercial interests of all those involved.
“Accountants must not allow undue influence of others to override their professional judgements and they must have a clear understanding of who their client actually is. The result in this case demonstrates our commitment to ensure the standards of the profession are upheld so that it can justifiably secure public confidence.”

A spokesman for Mazars says: “We regret that our conduct fell below our usual high standards in relation to this 2007 advisory assignment. We are pleased that the FRC accepted that the misconduct was neither dishonest nor deliberate, that we took appropriate remedial steps relating to quality assurance, and that it did not cause any actual loss to the beneficiaries of the pension fund.”