FD bags Grant Thornton over Parmalat wrangles

The UK arm of Grant Thornton has hired Financial Dynamics to manage the fall-out from the collapse of the auditor’s Italian client Parmalat.

FD is advising Grant Thornton’s UK partners on how best to limit the damage in a bid to ensure its reputation doesn’t suffer the same fate as Andersen did over the collapse of Enron.

Grant Thornton head of communications Sharon Murphy did not return calls as PRWeek went to press.

FD refused to comment on its appointment, but sources close to the company said the firm will work alongside Grant Thornton International’s retained corporate adviser Four Communications.

US-based Grant Thornton has been named in a lawsuit launched by the Southern Alaska Carpenters Pension Fund. The fund, which held investments in Parmalat, is arguing that neither Grant Thornton nor the company’s group auditor Deloitte & Touche should have vouched for the accuracy of the Italian dairy company’s accounts.

Parmalat failed to recover around £634m from Epicurum, its Cayman Islands subsidiary. Grant Thornton’s audit testified to the credibility of Epicurum’s figures. The Epicurum money is part of the £7bn alleged to have disappeared from the group.

Grant Thornton, which audited Parmalat’s accounts between 1990 and 1999, has insisted that its staff acted correctly and that it has been a victim of fraud.

As the extent of the Parmalat debacle became clearer this month, Grant Thornton moved to distance itself from the Italian part of its business responsible for the audit. On 8 January it expelled the Italian subsidiary Grant Thornton SpA from its international network.

The former chairman of Grant Thronton SpA and a partner who vouched for Parmalat’s offshore unit are among ten people now under arrest. Grant Thornton SpA has since changed its name to Italaudit.

Earlier this month, US financial services company Countrywide dropped Grant Thornton as its auditor after 30 years, but said the decision had nothing to do with the Parmalat scandal.

Deloitte & Touche, which certified the accounts of Parmalat, is also defending itself against the lawsuit from the Alaska Carpenters Fund.

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