As of: March 28, 2024, 9:13 p.m
By: Lisa Mayerhofer
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Wirecard shareholders have filed lawsuits worth billions against the auditor EY. Now they are accusing the company of trying to get out of the affair with a legal reorganization. © Imago/YAY Images/Joerg Boethling (montage)
Wirecard shareholders have filed lawsuits worth billions against the auditor EY. Now they are accusing the company of ducking out of the way with a legal reorganization.
Munich – The Wirecard accounting scandal is one of the largest economic scandals in the Federal Republic. And it has some consequences for the auditor EY. Numerous Wirecard shareholders have filed claims for damages against EY and, according to a report, are now accusing the company of using “trickery” to get out of the affair in order to avoid having to pay.
Wirecard scandal: Industry regulator imposes supervisory ban on EY
According to the accusation, the auditing firm EY, as a long-standing auditor at the payment service provider Wirecard, has violated its duties for years. The auditors did not notice the accounting fraud until Wirecard had to file for bankruptcy in June 2020 when it became known that 1.9 billion euros were missing from the cash register.
Therefore, the state industry regulator APAS imposed a fine of 500,000 euros on EY, the maximum amount under the legal situation at the time. Five auditors are expected to pay fines of between 23,000 and 300,000 euros, and seven others have given up their licenses. In addition, an order ban was imposed for 24 months - EY is no longer allowed to accept audit orders from listed companies during this period.
The auditor will not defend himself against the authority's decision to block the order, EY announced this Tuesday. “EY Germany has decided not to appeal the APAS decision, even if we do not agree with the APAS assessments in their entirety,” a spokesman said on Tuesday. “This process is now complete.”
Wirecard plaintiff: EY should provide security for possible compensation payments
EY wants to draw a line under the Wirecard affair. In addition, the major auditor has carried out a legal reorganization. But this is upsetting numerous Wirecard plaintiffs: They have filed claims for damages against EY and now fear they will be left empty-handed because of the legal reorganization, even after winning the lawsuit.
That's why they want to force EY to provide security for possible future compensation payments. The Berlin law firm Schirp & Partner announced this to the
Handelsblatt
. The capital market law specialists represent 1,500 former Wirecard shareholders who are demanding damages from EY due to possible audit errors. In total, there are more than 4,000 lawsuits worth billions against EY at the Munich Regional Court.
“We will demand security for the plaintiffs we represent, and I very much hope that the other major plaintiff representatives will do the same,” says plaintiff lawyer Wolfgang Schirp to
Handelsblatt
. He therefore accuses EY of “trickery” that could be stopped with “a joint effort”.
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EY: Does the legal reorganization have consequences for plaintiffs for damages?
The background: EY converted Ernst & Young GmbH, which had been the defendant in the Wirecard case for decades, into a limited partnership (KG) at the beginning of February. It still has to be responsible for legal matters, but the liabilities are now regulated differently. The four company divisions that EY has appointed as limited partners only have limited liability for small amounts, the newspaper reports.
EY rejects the allegations: “The changes made to corporate law have no impact on the liability risks for existing and completed mandates or on ongoing civil proceedings,” the company writes to the
Handelsblatt
. Attorney Schirp, on the other hand, fears that the plaintiffs could end up empty-handed despite winning in court because there is not enough liability. “We are convinced that EY is primarily concerned with limiting liability for the Wirecard scandal,” Schirp told the newspaper.
It remains to be seen whether the law firm can enforce the demand for security for the Wirecard plaintiffs. In any case, EY rejects this claim as baseless.
With material from Reuters