KPMG sued over B&C by rival accountants

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The Independent Online
BRITAIN'S second-largest accountancy firm, KPMG Peat Marwick, is being sued for damages over its role in the British & Commonwealth affair.

The action is brought by the rival accountants Spicer & Oppenheim, formerly called Spicer & Pegler and now merged with Touche Ross, the country's sixth-biggest accountancy practice.

KPMG audited the accounts of Atlantic Computers' European subsidiary while Spicer audited the parent company. Atlantic was bought by B&C for pounds 407m in 1988.

In a writ lodged in the High Court last week Spicer claims damages for 'negligence and/or breaches of duty and/or negligent misstatement and/or negligent misrepresentation and/or negligent withholding of information'. No sum of damages is mentioned.

Spicer was singled out for criticism in the report by the Department of Trade and Industry into the collapse of B&C, which said: 'We are critical of the standard of auditing of Atlantic's financial statements carried out by Spicer.'

A spokesman for KPMG said the DTI report exonerated its role. 'We are completely mystified as to why Spicer is taking the action it is,' he said. 'We shall contest this writ in every possible way.'

A spokesman for Spicer said the measure was a protective action. Spicer and KPMG are both being sued by Ernst & Young, the liquidators of B&C. He said the action against KPMG would be pursued only if Ernst & Young continued with its proceedings.