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Deloitte partner challenges probe that led to dismissal

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Via Financial Times

A Deloitte partner “bullied” staff and charged a client for a trip to the Singapore Grand Prix, according to an investigation into his conduct by the firm.

David Joseph, a Switzerland-based partner, was dismissed by Deloitte after the Big Four accounting firm conducted an investigation into his behaviour following complaints to its whistleblowing hotline in late 2018. 

The investigation looked at expense claims over several years that included a new scarf, a health club membership, an iPhone 6 case, train season tickets and an iPad pro.

Mr Joseph is challenging Deloitte in the High Court in London, claiming he was denied his right to appeal against the decision. Mr Joseph has also demanded that the firm convene a meeting of its partners to allow him to challenge the board’s decision before them.

A summary of Deloitte’s allegations has been filed by Mr Joseph, 45, at the High Court as part of his legal action. The probe by the accounting firm claimed his “bullying” and “manipulative” behaviour led to a “toxic working environment” and resulted in one member of staff being hospitalised with stress.

In his court filing, Mr Joseph has rejected each of the allegations and has criticised Deloitte’s handling of the investigation, which he said was “biased”, “misleading”, and that its findings were “based on an improperly limited scope of information”.

The Deloitte investigation also alleged Mr Joseph’s use of expenses showed a “lack of judgment”, according to the court filings.

He charged a business development visit to Singapore, including a team trip to the Formula One race, and another to Bangkok in September 2018 to a client account, the investigation claimed. It said Mr Joseph had “acknowledged” he had also “perhaps been ‘over-generous’ to himself”.

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“A number of staff members reported favouritism, citing as an example an extravagant trip organised by [Mr Joseph] to a hotel in Sicily for about 20 staff members following a major project,” it was alleged.

In the court filings, Mr Joseph said the trip to Sicily was to reward staff for three years of work on a project for Credit Suisse and was approved by Simon Owen, then chief executive of Deloitte Switzerland.

Deloitte’s investigation found: “While this team event was approved, the review team felt it had crossed the line of extravagance.”

Mr Joseph joined Deloitte in 2012 from KPMG, where he had worked in its forensic accounting unit for seven years, becoming a partner in 2009. The controversy is the second time difficulties have hit Deloitte’s Switzerland business this month after an internal memo revealing a significant decline in profits was leaked to a Swiss blog

In its own court filing, Deloitte said Mr Joseph’s claim was misconceived.

Deloitte’s investigation also contained claims by a member of staff who said that Mr Joseph “bullies individuals and no one says anything because they fear retaliation”, according to the summary of them filed by Mr Joseph.

One person interviewed as part of the probe alleged: “You are either in or out of favour. Those in favour, he buys loyalty with promotion, pay rises and trips. If you challenge him or contradict him you have had it.”

Mr Joseph is also alleged to have had a “possessive and jealous” approach to client relationships and revenue sharing, and that a junior staff member felt pushed to “fake figures” in relation to fees shared on a project with another Deloitte office.

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Mr Joseph said in court filings that the allegations were “devoid of any corroborative evidence” and that statements about his character “failed to incorporate any contemporaneous written documents . . . such as [his] superior performance reviews”.

The 2018 inquiry was the second time Deloitte had investigated Mr Joseph after an earlier inquiry in 2015 looked into a complaint that he was “belligerent and disrespectful” and “maintained an atmosphere of fear”, according to the court filings.

Mr Joseph declined to comment. Deloitte said it would not be appropriate to comment on ongoing legal proceedings.

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