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Administrators must face review

MICHAEL JORDAN and Richard Stone, the administrators of Polly Peck International, have been ordered to submit their practices to an independent professional review to determine whether they have the systems necessary to spot potential conflicts of interest, writes Roger Trapp.

The move, stemming from their acceptance of the Polly Peck appointment, was ordered by the practice regulation review committee of the Institute of Chartered Accountants in England and Wales. It overturns a decision in April by the insolvency licensing committee to impose restrictions on their licences. However, if the licensing committee is not satisfied with the review findings it can decide on further action.

The institute yesterday strongly defended the comparatively light penalty, which is being seen as a sign of failure by the accountancy profession to control the conduct of leading firms and prominent individuals.

The review is intended to be completed by the end of this month. But Coopers & Lybrand, which will bear the costs of its insolvency specialists, has asked that it cover general practice procedures as well.

Mr Jordan and Mr Stone were each fined pounds 1,000 by the institute's disciplinary committee last October for breaching ethical guidelines.