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January 21, 2016

News brief: KPMG partner quits after tax charges and UK regulator still under fire

By Franchesca Hashemi

KPMG advisory partner quits firm after tax charge

KPMG’s former head of investment advisory, Patrick McCoy, has quit the firm after becoming one of 10 people charged with tax cheating offences.

He is due to appear at Birmingham Magistrates’ Court on February 23.

KPMG has said it is aware of the charges brought against its former partner.

The group’s offences relate to a £134m investment scheme sold by Zeus Partners. It enabled investors to finance parts of an American film company. If the films made money at the box office, investors received a healthy return. If not, then tax relief could be gained by writing off costs against income.

The 10 involved have denied the charges.

In a statement, KPMG said: "The individual concerned is no longer a partner of the firm. It should be stressed that the matter does not relate to client work conducted by the partner or KPMG or to KPMG’s own affairs. We have been and remain fully available to cooperate with the authorities as necessary but we cannot comment further on a matter which is the subject of legal proceedings."

UK regulator still under fire Heads of the Financial Conduct Authority (FRC) in the UK have appeared in front of Parliament’s Treasury Select Committee to defend their decision to axe, without official public announcement, an inquiry into the City’s banking culture.

The FCA’s abandonment of the review first came to light on New Year ‘s Eve 2015.

Appearing in front of MPs on Wednesday were the FCA’s chairman John Griffith-Jones and acting leader Tracy McDermott, who announced earlier this month she would not take the top-job full time.

According to Reuters, asked whether the FCA had been leaned on by the UK government to ditch the banking culture review or if the regulator’s independence is being compromised, Griffith-Jones replied, "The simple answer to both is no."

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