Shareholders File Criminal Complaint Against EY for Alleged Role in Wirecard Sca

[SRShanuka2020]

Shareholders File Criminal Complaint Against EY for Alleged Role in Wirecard Scandal

Shareholders in German fintech Wirecard are taking legal action against Big Four auditor EY in the fallout from the scandal now engulfing the company.

Earlier this month, the auditor had refused to sign off the fintech’s 2019 financial report after discovering a shortfall of €1.9 billion (roughly $2.1 billion) on its books.

Following EY’s discovery, German authorities arrested Wirecard’s (now-former) CEO, Markus Braun, who had been at the helm of the fintech for almost two decades.

Braun has been accused of conspiring to inflate the company’s assets and misrepresent what amounted to over 32% of Wirecard’s assets — $2.1 billion of a claimed $6.5 billion.

According to CNBC on June 26, EY said that there are “clear indications that this was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception.”

The auditor defended its position, claiming that “even the most robust and extended audit procedures” would not be able to derail a “collusive fraud” of this nature.

The German shareholders’ association, Schutzgemeinschaft der Kapitalanleger e. V. (SdK), has nonetheless filed a criminal complaint against three EY auditors — two current and one former — for their alleged role in the accounting scandal.

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