Ex-FSA Chief Sants In Talks With Deloitte

Mark Kleinman, City Editor
Ex-FSA Chief Sants In Talks With Deloitte

The former chief executive of the Financial Services Authority (FSA) risks igniting a conflict of interest row by entering negotiations about a job with Deloitte, the accounting firm, just months after he left the City regulator.

I have learned that Hector Sants, who stepped down from the FSA in June, is in talks to become an equity partner at Deloitte. If he accepts the post, he would advise clients across a range of industries including in banking and financial services, insiders said today.

Deloitte, one of the ‘big four’ accounting firms, has made Mr Sants an offer but he has not yet accepted it and his appointment could fall through, according to people close to the discussions.

People close to Mr Sants said that he was considering a number of options and would not make up his mind about his next move until a period of gardening leave expired at the end of the month.

If he does opt to join Deloitte, it could be controversial given the amount of FSA work channelled through the big accountancy practices in recent years.

Deloitte's rivals were paid millions of pounds for assisting with widely-derided inquiries into the banking crisis, although it is unclear how much Deloitte itself made in fees from the regulator during Mr Sants' five years in charge.

Mr Sants is widely-regarded as an ethical individual whose personal conduct during his career has been beyond reproach.

It is unclear how much Mr Sants would be paid by Deloitte but he would be expected to rejoin the ranks of well-rewarded executives as a member of the partnership at one of the City's most profitable professional services firms.

If he does take the Deloitte role, Mr Sants would be the latest in a string of former executives from the City regulator to accept lucrative posts in the City.

Jon Pain, who headed the FSA's supervisory division, joined KPMG, another member of the 'big four', as a partner in its regulatory practice. Margaret Cole, the head of enforcement at the FSA, now works for PricewaterhouseCoopers, a third member of the powerful quartet.

Mr Sants would also be joining Deloitte at a time when the accounting profession is under intense scrutiny regarding the dominance of its audit work for FTSE-100 companies and across other areas such as tax planning and remuneration consulting.

Prior to joining the FSA in 2004, Mr Sants was an investment banker with Credit Suisse First Boston. He arrived at the regulator during the era of light-touch banking regulation that preceded the crisis of 2008, with banks allowed to operate with minimal oversight and wafer-thin capital levels.

Mr Sants was promoted to be chief executive of the FSA in July 2007, with one of his first decisions being not to raise objections to the takeover of the Dutch bank ABN Amro by a consortium led by Royal Bank of Scotland (RBS).

It was that deal that exacerbated the funding crisis at RBS and led to the bank requiring a £45bn rescue by British taxpayers, along with massive amounts of other Government support.

In 2010, Mr Sants resigned from the FSA following the new Coalition Government's decision to abolish the FSA and fold its responsibilities into two new bodies, one of which will be overseen by the Bank of England.

George Osborne, the Chancellor, persuaded him to stay on as a deputy governor of the central bank while overseeing the FSA's transition to the new regulatory framework.

Mr Sants, who resigned for the second time in March, could not be reached for comment today. Deloitte declined to comment.