The UK’s professional body for accountants has been accused of “rank injustice” for pocketing the £13m in fines against KPMG over the Silentnight pension scandal.
The Institute of Chartered Accountants in England and Wales (ICAEW) will keep all the money, despite accusations it is benefiting from the misbehaviour of those within its profession, The Times first reported.
The Big Four firm was hit with the lofty fine by the Financial Reporting Council (FRC) last year, after the Silentnight pension scheme was pushed into administration to allow US private equity firm HIG to buy a mattress company without the pension burden.
One of the scheme’s 1,200 members, Ted Pick, who is 96 and a former sales manager at armchair maker Parker Knoll, which was bought by Silentnight, said: “To see the fines imposed on those who facilitated this process being paid into the Institute of Chartered Accountants and not into the pension scheme is rank injustice.”
Former chairman of the pension scheme trustees and a former chairman of Parker Knoll, Martin Jourdan added: “I find it bizarre if not unnatural justice that the fines are going to the trade association of those involved. It’s not right.”
The accountancy body said it should be allowed to keep the fines as it funded the initial investigation into the scandal, which saw former KPMG senior partner David Costley-Wood fined £500,000 for his role in debacle.
However, the ICAEW has reportedly refused to outline the costs it racked up during the process.
The institute said: “This fine money is not a windfall for ICAEW. The Accountancy Scheme was never intended to be a compensation scheme for third parties who may have suffered losses as a result of actions of ICAEW members.”
The £13m sanction, and £500,000 fine against the former KPMG partner, are the highest ever imposed on an accounting company in a non-audit case.
KPMG declined to comment.
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