The stock ECU has a safety feature that stops the engine overboosting and killing your pistons.
If the limit for safe boost is hit the ecu cuts the fuel to the engine and flashes the engine management light in the instrument cluster at you.
In later models (1992 onwards) the engine management lamp can remain lit and my guess is that he is referring this to a 'safe' or 'limp-home' mode. The fact that the light is illuminated should stop the driver from driving excessively hard anyway.
Once the ignition is switched off and on again the lamp is cleared and will function normally. I've experienced a few occassions where the lamp only remains lit for a brief period after experiencing fuelcut.
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So basically it sounds from your description like your car is overboosting - The ecu's safety feature is working and stopping your engine from blowing up.
The first thing to do is to fit a boost gauge. This way you can see how the car is boosting and if indeed it is fuelcut that you are dealing with.
From there you can decide on what needs done.
Hope that helps,
Jay