Maxwell: Call for tighter rules

By ROBERT LEA
Updated:

 

A RAFT of recommendations about City practices and the roles of advisers has been laid down by the Maxwell inspectors. Among the eight key suggestions is the splitting of the roles of chairman and chief executive and a shake-up in auditing and flotation rules.

Some of these have already been implemented in the 10 years since the collapse of the Maxwell empire and the flotation of Mirror Group. The inspectors say there needs to be:

• A separation of the offices of chairman and chief executive.

• Detailed guidance on the audit of business 'empires'.

• An investigation of 'auditor independence' to maintain public confidence and discourage firms from acting as reporting accountants to a company when they are the auditors.

• A statement of guidance on the role and duties of advisers on a flotation.

• Sanctions against companies that do not report fraud and the encouragement of the secondment of staff from leading firms to regulatory bodies.

• New regulations to control groups operating transnationally.

• Training and more assistance for occupational pension scheme trustees.

• Avoidance of an 'expectations gap' so that the public is aware that regulators 'cannot eliminate fraud, malpractice or manipulation of the markets'.

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