Accountancy firm Deloitte has had a £14 million fine relating to its dealings with collapsed car maker MG Rover cut to £3 million after an appeal.

The reduced penalty was announced after an appeals tribunal earlier this year threw out eight of 13 charges against the firm in a case brought by the Financial Reporting Council (FRC).

It also cut the fine imposed on former Deloitte partner Maghsoud Einollahi from £250,000 to £175,000 and reversed his three-year ban from the profession. Instead, he and Deloitte were given a “severe reprimand”.

MG Rover collapsed into administration in 2005 with debts of £1.4 billion and more than 6,000 job losses. It had been bought by directors known as the Phoenix Four for a token £10 five years earlier.

The FRC filed a formal complaint against the firm and Mr Einollahi in 2012 and the initial fines were imposed in September 2013 after a tribunal ruling.

In January this year, the appeals tribunal upheld five allegations but dismissed two over activities in 2001 related to Project Platinum, a scheme to dispose of the MG Rover loan book. The accountants’ fee for this was £7.5 million.

The appeals panel said the accountants “acted as powerful advocates for the (Phoenix) partnership to ensure it was they, rather than MGRG (MG Rover Group), who benefited from the expected very substantial profits”.

Upheld charges included failure to identify conflicts of interest in relation to Deloitte’s dealings with MG Rover and the Phoenix Four.

The Phoenix Partnership expected to make £7 million from the deal but in the event made £14.4 million.

But the appeals panel threw out all six findings on Project Aircraft, a scheme in 2002 to offset the losses within the car maker against profits elsewhere, for tax purposes.

Deloitte was paid £1.9 million for the scheme, which resulted in £22 million paid to a Guernsey trust whose beneficiaries included members of the Phoenix partnership.

MG Rover received no benefit but “it was not suggested that this occurred as a result of any advice of the appellants (Deloitte)”, the appeals tribunal said.

The panel concluded that the accountants should face a “substantial fine”, citing their “egregious failures properly to consider conflicts and the interests of MGRG, and their overwhelming consideration of the interests of the Phoenix Four and the Phoenix Partnership”.

It also referred to “the sums of money involved and potentially involved and the importance of MGRG and its business to a large number of people”.

A spokesman for Deloitte UK said: “Reducing the sanctions imposed by the original tribunal was never a motivation in our appeal.

“We welcome the decision to overturn the exclusion of our former partner and accept the revised sanctions outlined by the appeal tribunal.”

The firm said it was pleased that findings it failed adequately to consider the public interest and of deliberate serious misconduct had been overturned, but accepted “findings that aspects of our client engagement processes could have been better”.