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Critics' ire turns on auditor EY after Wirecard collapse



Some plaintiffs have already launched legal cases against EY after Wirecard's spectacular bankruptcy

Comparisons between the Wirecard scandal and the collapse of Enron in the early 2000s

Updated 55 min 53 sec ago

AFP

June 28, 2020 09:58

FRANKFURT: Global audit giant EY is facing growing questions and threats of legal action over its role in the bankruptcy of German payments processor Wirecard after signing off on the accounts for years.

Some plaintiffs have already launched legal cases against EY after Wirecard's spectacular bankruptcy last week.

German shareholders' association SdK said Friday it had launched a case targeting two auditors still working at EY and one former employee.

Listed on the blue-chip DAX index since 2018, Wirecard filed for insolvency Thursday after acknowledging that $2.1 billion supposedly held in trust for it in bank accounts in the Philippines did not exist.

German Finance Minister Olaf Scholz has called the Wirecard collapse an "unprecedented scandal in the financial world,“ saying it was a "wake-up call that we need more supervision“ in financial markets.

Neither Wirecard's private-sector auditors nor Germany's financial markets watchdog BaFin saw the crunch coming.

Press reports had since 2015 pointed to possible irregularities in Wirecard's business model, while the