Curator of Bankrupt Wirecard Sues Ernst & Young for 1.5 Billion Euros

Dec 30, 2023 at 6:47 AM Update: an hour ago

The curator of the bankrupt payment processor Wirecard from Germany has started a lawsuit against Ernst & Young (EY). The accounting firm is accused of shortcomings in audits.

EY accountants were responsible for auditing Wirecard’s annual figures. The curator accuses them of long-term systematic shortcomings in controls and demands compensation of 1.5 billion euros.

The complaint concerns audits of the annual accounts from 2015 to 2019. “The defendant repeatedly, seriously and intentionally violated his contractual and legal obligations as an accountant,” the court papers read.

The case concerns the so-called Wirecard scandal. The company started processing credit card payments in 1999 and grew to become one of the most valuable companies on the Frankfurt Stock Exchange. But the company collapsed and former top executives were prosecuted.

According to the curator, damage could have been prevented

Since 2019 wrote business newspaper Financial Times about accounting irregularities at Wirecard. A year later, accountants also found evidence of the tampering with figures.

The company went bankrupt in 2020 when it became clear that almost 2 billion euros had been lost on the balance sheet.

“If the matters had been properly investigated, the Wirecard affair would have been discovered at an early stage, the harmful actions of those responsible would have stopped there and the resulting damage would have been prevented,” the complaint against accounting firm EY reads.

The curator and EY did not want to respond to the German news agency DPA.

Image: AFP

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2023-12-30 07:08:08
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