The Wirecard scandal, already infamous for its dramatic revelations and legal entanglements, unfolds a new chapter as former shareholders target EY, the erstwhile auditor of the now-defunct German FinTech giant. This legal move comes amidst growing concerns over EY‘s recent restructuring, which plaintiffs argue is a maneuver to shield itself from liability. At the same time, Wirecard is reportedly developing into an international espionage thriller centered around Jan Marsalek.
At the heart of the dispute is the accusation that EY‘s reorganization in Germany, reported first by the German Handelsblatt and finalized in February, complicates efforts by investors to claim damages. This restructuring saw EY dividing its profitable consulting services from its auditing operations, a move that has led to asset reallocations within the firm. Given EY‘s decade-long auditing relationship with Wirecard, the auditor faces billion-euro claims for allegedly neglecting thorough financial inspections.
Investor lawyers, voicing their clients’ frustrations, allege that EY‘s restructuring amounts to strategic evasion of responsibility. They are now urging the Higher Regional Court to ensure that all EY entities are held accountable for the Wirecard fallout. Additionally, they seek assurance that EY will provide security for potential future compensations.
The German lawyer Wolfgang Schirp, representing 1,500 former Wirecard investors through the Berlin law firm Schirp & Partner, has criticized EY‘s actions as deceitful. He stresses the importance of a unified legal front to counteract EY’s alleged “trickery.”
Meanwhile, Wirecard‘s insolvency administration is exploring further legal avenues. Michael Jaffé, the insolvency administrator, previously launched a €1.5 billion damage suit against EY.
The restructuring has sparked fears that EY‘s consultancy divisions might only bear liability for Wirecard-related claims for a limited period, potentially sidestepping long-term legal responsibilities given the protracted nature of class actions in German courts. EY, however, refutes these claims, asserting that its reorganization does not affect its liability risk regarding ongoing legal disputes. The firm attributes the structural changes to aligning with the international EY organization and distinguishing more clearly between its auditing and consulting segments.
Claimants, however, remain skeptical. Lawyer Schirp contends that EY‘s primary aim is to limit its liability exposure from the Wirecard scandal. The crux of the matter lies in the extent of liability the restructured units hold, especially since the tangible assets of these consulting and auditing divisions are minimal.
As the legal skirmish escalates, the Munich Regional Court has seen a surge in lawsuits related to Wirecard, with the number of civil proceedings almost doubling in 2023. Most of these legal actions are directed against EY, which had given Wirecard‘s financial statements clean bills of health until 2018, only to retract its audit certificate in 2019, just before Wirecard‘s collapse—a debacle that resulted in substantial financial losses for investors.
