Finances - Wirecard insolvency administrator demands 1.5 billion euros from EY
The Wirecard insolvency administrator is seeking around 1.5 billion euros in damages from the auditing firm EY. The lawsuit was received by the Stuttgart Regional Court on December 20, a court spokesperson announced on Friday. Neither EY nor a spokesperson for the insolvency administrator made any comment when asked. The "Handelsblatt" had previously reported.
The court in Stuttgart has jurisdiction because the auditing company is based there. The payment service provider Wirecard, which was listed on the DAX at the time, collapsed in 2020 after 1.9 billion euros allegedly held in escrow accounts could not be found. The auditing firm EY had audited the balance sheets for years. Former CEO Markus Braun, who is accused of fraud, has been on trial before a criminal chamber of the Munich Regional Court for a year.
The insolvency administrator accuses EY of many years of systematic failure in auditing the annual and consolidated financial statements of Wirecard AG as well as the annual financial statements of Wirecard Technologies GmbH for the financial years 2015 to 2019 and related services for the Wirecard Group, as the court announced. "The defendant had breached its contractual and statutory obligations as an auditor repeatedly, seriously and deliberately."
The insolvency administrator argues that the annual and consolidated financial statements of Wirecard AG and the annual financial statements of Wirecard Technologies GmbH should no longer have been audited without qualification since 2015 if they had been audited in accordance with their duties. The unqualified audit opinions issued by EY in breach of duty were incorrect. "If the Wirecard affair had been audited as required, it would have been uncovered at an early stage, damaging actions by those responsible there would have been stopped and the resulting damage would have been prevented and would not have occurred," the lawsuit continues, according to the court.
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- The lawsuit against EY for Wirecard's insolvency is being handled by the Banks Supervisory Authority, located in the financial hub of Frankfurt, but the Stuttgart Regional Court has jurisdiction due to EY's base in Stuttgart, Germany.
- The demand for 1.5 billion euros from EY by the Wirecard insolvency administrator is significant, considering that Baden-Württemberg's economy, with major cities like Stuttgart and Heidelberg, is one of Germany's strongest, robustly supported by tech companies and Banks.
- Handelsblatt reported on the lawsuit against EY, sparking further discussions in Munich, Bavaria, and across Germany about the responsibilities of auditing firms and the serious consequences of their failures.
- The Stuttgart Regional Court's decision in this process may have significant implications not only for EY but also for other Banks and audit firms in Baden-Württemberg and Bavaria, as well as Germany as a whole.
- The Wirecard insolvency administrator's accusations of EY's systematic failures in auditing Wirecard's financial statements from 2015 to 2019 align with the severity and complexity of the case, as the younger generation in Germany is now closely observing the proceedings in the Stuttgart Regional Court.
- As the insolvency administrator's lawsuit against EY moves forward, financial experts in Stuttgart and other major German cities are closely following this case, further highlighting the serious implications of the Wirecard insolvency and the role of auditing firms in financial processes.
Source: www.stern.de
