MP in attack on Coopers

Breach of partnership rules alleged
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AUSTIN MITCHELL, the Labour MP, has accused one of Britain's biggest accountancy firms, Coopers & Lybrand, of "playing ducks and drakes with the partnership rules in their efforts to take on lucrative government business".

Mr Mitchell made the accusation in two letters he sent to the Institute of Chartered Accountants (ICA) and the Department of Trade and Industry (DTI). The MP has taken up the case of Mark Hardy, a bankrupt businessman waging a one-man campaign against Coopers.

Mr Hardy raised the stakes last week by attempting to launch legal action against 44 current and former Coopers personnel. They include Brandon Gough, the former senior partner of Coopers and present deputy chairman of SG Warburg; Sir Brian Jenkins, a former Lord Mayor of London and retired head of audit; and Sir Christopher Foster, a retired partner and a director of Railtrack.

A closed court hearing is set for Thursday, when Mr Hardy will lay his allegations before Thames magistrates' court and attempt to persuade the court to issue a summons against the Coopers 44.

Mr Hardy's conflict with Coopers began five years ago, when his three Bermuda-based insurance companies were put in the hands of liquidators from the firm. He was put into personal bankruptcy by the same liquidators two years ago.

Coopers has consistently dismissed Mr Hardy's campaign as nothing more than an "irritant", with no real substance. He has based it upon a close reading of the rules governing accountancy partnerships.

Under ICA rules at least three-quarters of the partners in accountancy firms must be chartered accountants.

With the boom in management consultancy and insolvency, many Coopers partners are not chartered accountants. Firms have got over this perfectly legally by creating associate firms. But Mr Hardy claims to have unearthed discrepancies in Coopers' partnership arrangements.

These alleged discrepancies have been dismissed by both Coopers and the ICA.

A Coopers spokesman firmly rejected the suggestion that Mr Mitchell's high-profile intervention would assist Mr Hardy's campaign. "We will deal with these actions when they come to court on Thursday," he said. "I imagine the outcome will be the same as every other time Mr Hardy has been to court.

"He tried to get Coopers wound up, and he was thrown out. He tried to interfere with the Joint Disciplinary Scheme hearing into Coopers, and he was thrown out. He went to court, too, for costs on Thursday and he lost."

Mr Hardy has written hundreds of letters to the Government and City regulators in his campaign, claiming - among other things - that if Coopers' partnership arrangements are not in order, then Coopers' audit of BT may be invalid.

It has all been to no avail, but Mr Hardy is undaunted. "There is a clear case for investigation into Coopers," he said. "It's all too silly for words. I have deliberately chosen high-profile individuals [against whom to bring legal action]."