Sunday November 14, 2021
Compensation action planned
Wirecard scandal could be expensive for EY
EY’s auditors have been checking Wirecard’s balance sheets for years – without suspecting that something is wrong. Whether you acted willfully or negligently is decisive for possible claims for damages. A lawsuit is becoming more and more likely.
According to the “Handelsblatt”, the insolvency administrator of the Wirecard payment processor, Michael Jaffe, is examining claims for damages against the long-standing Wirecard auditor EY. Jaffe had commissioned Martin Jonas from the auditor Warth & Klein Grant Thornton to do this, the paper reported. A lawsuit is in preparation.
In essence, it is about the question of whether EY made mistakes and, if so, how difficult they were, Jonas told the newspaper. The answer depends on whether and to what extent EY has to be liable. A liability limit only applies to negligent mistakes, said Jonas. It looks different with direct or indirect intent. Generally speaking, the following applies: “If auditors knew that the balance sheet was wrong and they still issue a certificate, they have unlimited liability.” This also applies in the case of conditional intent, i.e. if the damage has been accepted with approval.
Jonas will now prepare a report on the work of EY on behalf of Jaffe. If Jonas comes to similar results as the special auditor appointed by the German Bundestag’s investigative committee to Wirecard around the auditor Martin Wambach, a lawsuit against EY is likely, according to the newspaper.
The Handelsblatt had last made the Wambach report, which had been classified as secret, public. The Handelsblatt quoted an EY spokesman on a possible Jaffe lawsuit as saying: “Please understand that we are fundamentally unable to comment on individual or potential lawsuits. We would like to emphasize, however, that our auditors do their auditing to the best of their knowledge and belief have performed. ”
Wirecard went bankrupt in June 2020 after air bookings worth billions became known. The Munich public prosecutor’s office is investigating balance sheet falsification, fraud, market manipulation and money laundering.