After the collapse of the financial group Wirecard, the investor organization DSW filed a major claim for damages against the auditors EY Deutschland and EY Global. The lawsuit contains claims for damages from more than 13,000 institutional and private Wirecard investors with a claim volume of over 700 million. Euro, said the DSW.
The document with appendices comprises over 80,000 pages. Thanks to a Dutch foundation model and the involvement of British litigation financiers, investors would have no cost risk; only in the event of success would part of the proceeds obtained through a judgment or settlement be passed on.
DSW lawyers Klaus Nieding and Andreas Lang explained that EY had failed to convince itself of the existence of the third-party business through its own checks. Instead, the responsible auditors relied on the statements of Wirecard management. “In addition, EY could have determined relatively easily that the 1.9 billion euros did not exist, because the special auditors from KPMG later found that out very quickly.” The auditor EY, which had approved the company’s balance sheets from Aschheim near Munich for years, did not want to comment on the lawsuit.
According to a newspaper report, Wirecard insolvency administrator Michael Jaffe has also sued the auditing company for damages. A spokesman for Jaffe did not give any details to the “Handelsblatt”. The lawsuit was filed with the Stuttgart Regional Court this year in order to prevent the statute of limitations from running out. Jaffe believes it has been proven that the third-party business with alleged partners in Asia was fabricated.
The then listed payment processor Wirecard, which was included in the Dax, collapsed in June 2020 when it was discovered that 1.9 billion euros were missing from escrow accounts in Asia. Former boss Markus Braun, who comes from Austria, and two other ex-managers are in the dock for falsifying accounts and gang fraud. Former Wirecard board member Jan Marsalek, also Austrian, has gone into hiding since the group’s collapse.
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