The terms and conditions of the relevant agreements and the representations set forth in your letter, among other things: (1) explicitly limit as of the execution date, December 31, 2003, of the Share Purchase Agreement, and within three years thereafter end, any retained interest in Liberata by Deloitte & Touche-UK and its partners or any other entity included in the definition of the DTT Entities (2) impose limitations on the use of the DTT Entities’ names by Liberata (3) require a strict separation of the corporate governance, management, and financial structures and interests between all entities included in the definition of the DTT Entities and Liberata (4) prohibit any revenue or profit sharing between any entity included in the definition of the DTT Entities and Liberata (5) prohibit any joint marketing between the DTT Entities and Liberata and (6) restrict any shared services between the DTT Entities and Liberata.Īssuming that the representations set forth in your letter continue to be accurate, and further assuming that DTT continues to comply with each of the terms and conditions set forth in your letter, the Office of the Chief Accountant (“OCA” or the “staff”) will not recommend an enforcement action asserting that DTT lacks independence as a result of non-audit services provided to DTT’s audit clients by Liberata. Your letter concludes that, based on its compliance with those terms and conditions, that Liberata would not be considered an associated entity of Deloitte & Touche-UK or any other DTT Entity under the terms and conditions governing these transactions, and that no DTT Entity would have a “mutuality of interest” or a “direct or material indirect business relationship” with, or a “direct financial interest or material indirect financial interest” in any of its audit clients as a result of the activities of Liberata, its directors, employees or controlling shareholder (which activities include, without limitation, providing services to, entering into business relationships with, and making or receiving investments in or from third parties).Īs you are aware, the Sarbanes-Oxley Act of 2002 (the “Act”) expressly prohibits any registered public accounting firm, or any associated person or entity of that firm, from providing certain non-audit services to its audit clients that are “issuers” as defined in the Act. In your letter, you detail key terms of the relevant transactions and conditions that DTT, including entities that have been considered part of DTT under Rule 2-01(f)(2) of Regulation S-X (“DTT Entities”), will comply with in connection with the completion of these transactions.
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The staff has reviewed your letter of Novemconcerning the sale of certain partners of Deloitte & Touche LLP, a limited liability partnership incorporated under the laws of England and Wales (“Deloitte & Touche-UK”) and a member firm of Deloitte Touche Tohmatsu (“DTT”) in the United Kingdom, of their controlling interest in Liberata plc (“Liberata”) to investment entities affiliated with General Atlantic LLC (formerly known as General Atlantic Partners, LLC). Letter from Deputy Chief Accountant to Deloitte Touche Tohmatsu on the disposition of their controlling interest in Liberata plc (November 7, 2005)