Manchester Building Society suing advisers for breach of contract in £49m claim

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Manchester Building Society is suing business advisers Grant Thornton for £49million.

The building society yesterday said it was pursuing its former auditor for ‘breach of contract, negligence and breach of statutory duty relating to audit services and advice’.

Grant Thornton resigned from the work in 2013.

Claim: Manchester Building Society says that the accountants' poor advice had forced it to restate its profits from a profit to a loss (Pictured: Manchester city centre)

The claim is understood to concern advice and audit services relating to how to account for interest rate swaps the Manchester entered into to hedge its risk on certain fixed rate mortgages.

The building society claims poor advice meant it had to restate its 2011 results, which moved from a £600,000 pre-tax profit to a £21.9million loss, and its 2012 accounts also showed a £2.3million loss.

‘If the Society is unable to reach satisfactory agreement with Grant Thornton the matter will progress to a court hearing,’ a Manchester Building Society spokesman said.

Grant Thornton could not be reached for comment.