A German shareholder body has accused âBig Fourâ auditor Ernst & Young (EY) of failing to spot a $2.1 billion black hole in Wirecardâs books soon enough.
Shareholdersâ association SdK filed criminal damages against EY Friday for not flagging Wirecardâs accounting practices earlier, reports CNBC. The group holds EY, and two current and one former employee in particular, responsible for not alerting the authorities and investors sooner, which ultimately culminated in the precipitous drop in the Wirecard share price.
â[T]his was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception,â said EY in a statement to CNBC. It argued that âeven the most robust and extended audit proceduresâ would have been unable to uncover this scale of âcollusive fraud.â
Earlier this month, before the most recent revelations of accounting malpractice, law firm Wolfgang Schirp had filed a class-action lawsuit against EY for its failure to spot improperly booked payments in Wirecardâs 2018 accounts.
At press time, Wirecard stock traded at â¬3.50 (roughly $4). Shares had been worth $105 on June 17, before the company admitted employees had purposefully filed false or misleading statements âin order to deceive the auditor and create a wrong perception of the existence of such cash balances.â
For the time being at least, Wirecard remains a constituent member of the DAX 30, Germanyâs most prestigious blue-chip stock index. The company filed for insolvency Thursday.
See also: Crypto.com Rolls Out Visa Card to 31 European Nations
The capitulation of Wirecard has thrown many client businesses up in the air. For example, crypto payment card providers Crypto.com and TenX have used cards provided by a subsidiary, the U.K.-based Wirecard Card Solutions.
Crypto.com told CoinDesk on Friday it was moving to a new provider just hours after the Financial Conduct Authority (FCA) ordered Wirecard Card Solution to cease operations with immediate effect.
TenX told customers they would no longer be able to use their cards. âThe TenX team is working to re-enable the affected services as soon as we can,â the company said in a statement.
