Big Four firm PwC has been awarded a £16.5m contract to manage UK Asset Resolution (UKAR) – the organisation that controls assets of failed bank Northern Rock
PwC was awarded the job of managing UKAR on behalf of the British government earlier this month, according to the Financial Times.
Northern Rock collapsed in 2007 and after being nationalised was split into two separate legal entities, Northern Rock Plc and Northern Rock (Asset Management), later renamed NRAM.
UKAR was established to sell the assets of both NRAM and other failed bank Bradford & Bingley (B&B) after the government lent UKAR a reported £48.7bn to take control of these assets – the Treasury is a 100% shareholder of UKAR.
“We launched a transaction aimed at selling the legal entities of NRAM and B&B, along with their remaining assets, which would allow us to complete our objective and dispose of the government’s investment in these businesses,” a spokesperson for UKAR said.
Following the sale’s completion, PwC will manage what remains of the holding company on behalf of the government under the Official Journal of the EU process. It will be “responsible for meeting contractual obligations to the buyer of B&B and NRAM, sponsoring the defined legacy benefit pension schemes, and administering other non-loan assets and liabilities”.
The Big Four firm had previously been accused of complacency in its audits of Northern Rock.
In the wake of the financial crash, a House of Lords enquiry into failures by audit firms to warn of reckless behaviour by banks prior to the crisis found PwC’s behaviour to be unsatisfactory.
The Economic Affairs Committee Report in 2011 noted that it found the firm’s “complacency disturbing” and that it was “astonished that PwC appeared not to recognise an amber light that flashed so brightly”.
The contract is set to run until 2030.
Sourced from ICAEW - written by Danny McCance