A probe by the Accountancy Board into one of Malta’s leading auditing firms, found guilty of negligence, has been put on hold until a court decides an appeal.

The inquiry had started following a court judgment last month which found Deloitte had acted in a negligent manner when compiling a report on the supermarket chain Price Club, which went bust a few months later in 2000 leaving some €20 million in debts and many suppliers in dire straits.

An appeal has been filed by both Deloitte and Valle del Miele, a chicken processing company that sued it for damages but was not awarded them.

A spokesman for the Accountancy Board said that, although the regulator had discussed the judgment, it had been decided to await the appeal before any action is taken against the firm.

“We have discussed the court’s judgment which found negligence on the part of Deloitte. Since the firm is contesting the decision, the Accountancy Board will now await the final court judgment until it probes further the issue,” the spokesman said.

The court had ruled that the auditors’ firm gave an optimistic picture of Price Club’s business and in no manner did it indicate financial difficulties.

The court’s preliminary judgment quoted court expert John Zarb stating that skilled professionals in the field would normally have found out much earlier that Price Club was on its way to collapse.

Although the court found that Deloitte was negligent in its work, it also said that the firm was not responsible for any damages as Valle del Miele should have engaged its own experts to examine Price Club’s situation and not rely on the chain’s own auditors.

Refuting any suggestion of negligence, the auditing firm insisted that it had no contractual link with Valle del Miele. It appealed the decision.

Valle del Miele also filed an appeal, insisting that Deloitte’s actions were tantamount to “fraudulent behaviour” and asked for a stronger judgment that would include payment of damages.