Two MPs are calling for an independent inquiry into the collapse of claims firm The Accident Group (TAG), after a report found it had traded insolvently for two years prior to its collapse.
The report, commissioned by two labour MPs, also found TAG's auditors ignored holes in its accounts.
The MPs are now calling for an independent inquiry into the failure in May of the company, which resulted in many of its 2,400 workers being sacked by text message.
Jim Cousins, MP for Newcastle upon Tyne Central, and Austin Mitchell, MP for Great Grimsby, submitted the report by Prem Sikka, a professor of accountancy at the University of Essex, to the Department of Trade.
The report also said TAG continued to make payments to investors despite its losses, which raised "serious questions about the independence of the auditors". KPMG declined to comment.
The group of five insurers, which is considering legal action against TAG's directors, welcomed the report's findings. One insurer said: "We'll be watching and waiting to see what happens next with interest."
