Firm accuses PwC of libel

PricewaterhouseCoopers maliciously passed on confidential information about a former audit client after it sought to have the accounting firm removed as liquidator of a related company, a court heard yesterday.

Nam Tai Electronics is suing PwC for breach of confidence and libel over a document it issued while lobbying to be appointed as liquidator of Nam Tai's Hong Kong-listed subsidiary Albatronics (Far East).

The document referred to a due diligence report on Albatronics that PwC had prepared while it was still Nam Tai's auditor, counsel for Nam Tai, John Griffiths SC, told the Court of First Instance yesterday. He said words in the document left the impression that his clients had 'irrationally, stubbornly or stupidly disregarded' PwC's advice in taking over Albatronics.

Nam Tai had earlier sought to have PwC's David Hague removed as liquidator of Tele-Art, a Nam Tai shareholder, claiming the firm had a conflict of interest.

The document was issued to Sumitomo Bank and circulated to other banks as PwC lobbied to be appointed as Albatronics' liquidator. PwC was commissioned to prepare the due diligence report after Nasdaq-listed Nam Tai launched a takeover bid for Albatronics in September 1998.

PwC resigned as Nam Tai's auditor in November 1998 after the company made it clear it would retain Deloitte as Albatronics' auditor.