Wirecard insolvency administrator demands €1.5 billion from EY
The insolvency administrator for the collapsed payment service provider Wirecard is demanding around €1.5 billion ($1.7 billion) in damages from the international auditing firm Ernst and Young, which goes by the initials EY.
The lawsuit was filed at the Stuttgart regional court on December 20th, a spokesman said on Friday. It was filed there because EY is based in Stuttgart.
Neither EY nor a spokesman for the insolvency administrator wanted to comment on the case on Friday.
The insolvency administrator accuses EY of long-standing systematic failure in the audit of the annual and consolidated financial statements of Wirecard AG. It also said such failures apply to the annual financial statements of Wirecard Technologies GmbH for the financial years 2015 to 2019 and related services for the Wirecard Group, the court said in a statement, citing the complaint.
"The defendant repeatedly, seriously and deliberately violated its contractual and legal obligations as an auditor," the complaint said, according to the court.
"If things had been examined properly, the Wirecard affair would have been discovered at an early stage, the damaging actions of those responsible there would have been stopped and the resulting damage would have been prevented and not occurred,” the lawsuit continues, according to the court.
Wirecard, which was listed in Germany's DAX stock market index at the time, collapsed in 2020 after €1.9 billion that were supposedly booked in escrow accounts could not be found. EY had audited Wirecard's balance sheets for years.
Accused of fraud, former Wirecard chief executive Markus Braun has has been on trial in Munich for the past year.
Institutional and private investors are claiming compensation of more the €700 million ($772 million) from EY.
