Three years after one of the State's largest stockbroking firms collapsed amid accounting irregularities and subsequent findings of malpractice, the body that oversees the accounting profession in Ireland has still not begun an investigation.
In 2012, Bloxham Stockbrokers was forced to cease trading after a Central Bank investigation discovered a €5.3 million hole in its accounts, effectively meaning the firm was trading without the required regulatory reserve.
The shortfall was found to stretch back several years but had escaped its auditor Deloitte, which signed off on several sets of annual accounts in the lead up to its sudden collapse.
Despite the high-profile nature of the case, the Chartered Accountants Regulatory Board (Carb), which oversees accountancy firms here including Deloitte, has still not commenced an investigation.
‘Duplication’
When contacted by
The Irish Times
, Carb said it was awaiting the outcome of the Central Bank’s investigation in order “to avoid duplication of processes”.
It also noted that any relevant information relating to auditors may be disclosed by the Central Bank to Carb under the existing legislation.
However, Central Bank sources said the bank’s inquiry, which remains open, did not preclude potential investigations into auditing practices by Carb.
A Central Bank spokeswoman said: “An extensive investigation is actively continuing and, once concluded, decisions regarding any possible future enforcement options will be made.
“Until such time as the investigation is completed, we are not in a position to comment. Any investigation that any other regulatory authority, such as Carb, wishes to carry out is a matter for that regulatory authority,” she added.
In May, the Central Bank banned Tadhg Gunnell, Bloxham's former head of finance and compliance, from managing a financial firm for 10 years and fined him €105,000 over his role in the controversy.
The disqualification order was the longest ever imposed on an individual by the State’s financial regulator.
As Mr Gunnell resigned his membership of Carb in 2012, at the time of Bloxham’s collapse, the board no longer holds powers to investigate him.
However, it retains powers to investigate Deloitte’s role as the firm’s auditor.
Bloxham's liquidator Kieran Wallace initially intended to pursue a case against Deloitte over its failure to spot the hole in the accounts but was later advised against it on cost grounds.
When contacted, Deloitte declined to comment.
Pursuing partners
The fallout from Bloxham’s demise is still being played out in the courts with Danske Bank pursuing several former partners for €34 million lent to the brokerage through its Irish subsidiary
National Irish Bank
.
The bank, which is represented by Dublin solicitors Ivor Fitzpatrick, alleges the financial accounts on which the loans were based were "faulty".
Danske obtained a judgment against Mr Gunnell for €2 million last year.
He subsequently applied for bankruptcy and was declared a bankrupt by the High Court in April.
The bank has also settled with former Bloxham manager partner Pramit Ghose, who recently parted ways with Davy to join Merrion Stockbrokers.
However, it is still pursuing cases against the five other former partners.
The liquidation of the State’s oldest and third-largest stockbrokering house, as it was in 2012, is still ongoing.
Last year, Mr Wallace tried unsuccessfully to retrieve €6 million that would have accrued to Bloxham – had it stayed afloat – from the privatisation of the Irish Stock Exchange, of which it had been a founding member.
