Labour MP sends letter urging new Man City investigation after guilty verdict over 114 charges

Liam Byrne, the Labour MP for Birmingham Hodge Hill and Solihull North, has sent a letter to an independent financial regulator requesting a new investigation into Manchester City's 'alleged misstatements' in their 115 charges case.

An independent commission found City guilty of all charges relating to serious breaches of the Premier League's financial regulations. City announced on Thursday that they had appealed the verdict, claiming the ruling contained 'clear material errors of law, principle and fact and is unsafe'.

The independent commission found that City had arranged 'sham' contracts that 'misrepresented the true agreement between the parties' and allowed them to 'artificially inflate the club's revenues and reduce its costs'. City continue to protest their innocence and say they have 'irrefutable evidence' to prove their position - though the commission concluded that this argument was 'concocted well after the event in an attempt to obscure and conceal the realities of the disguised funding scheme'.

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Labour MP calls for regulator investigation into Man City

Now, Byrne, who has been an MP continuously since 2004, has written to the chair of the Financial Reporting Council (FRC), an independent regulator which, as per its own website, 'regulate(s) auditors, accountants and actuaries, and set(s) the UK's Corporate Governance and Stewardship Codes'.

Though Byrne - who is the chair of the Government's Business, Innovation, Science and Trade Committee - begins with his recognition that the judgment is subject to appeal, he asks the FRC to examine the initial findings in City's case and outline what action it can take at the current moment.

"The findings raise a fundamental question: how could the established system of audit and regulatory scrutiny fail to uncover alleged misstatements of such a scale over nine years?" he asks in the letter.

"We are particularly concerned that these issues came to light through media reporting rather than the established audit and accounting process," Byrne continues.

"If the findings are upheld, I believe it is essential that the FRC must establish where scrutiny broke down, whether auditors exercised sufficient professional scepticism, and what must change to prevent a repetition."

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Labour MP sets deadline for new Man City investigation

Byrne then references the case of Carillion, a British construction company that collapsed in 2018. Earlier this year, it's former chief executive was fined £237,000 by the Financial Conduct Authority for being aware of 'serious financial troubles' at the firm but failing to 'respond appropriately to the warning signs'.

"The Manchester City findings raise a similar question," he writes. "Whether audit is providing an effective challenge to the accounts presented by those running an organisation.

"Accelerating the speed of investigations is essential to enhancing the FRC's effectiveness ... firms, investors and the wider public need timely answers when serious concerns arise.

"I would be grateful therefore if you would explain what resources would be required to investigate the Manchester City case promptly and robustly, and whether you are satisfied the FRC has those resources available.

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"Please set out what action the FRC can take in relation to the Manchester City findings under its existing remit, and where the limits of that remit lie; what additional powers or duties it requires to investigate potential accounting and audit failures of this kind and hold those responsible to account; what staffing, expertise and funding it needs to carry out such investigations promptly and robustly; what timetable the FRC proposes for its next steps, including how any appeal would affect that timetable."