Accountant Ernst & Young to be sued over Anglo Irish Bank collapse
Simon Read is Personal Finance Editor at The Independent. He edits the Saturday Your Money section and writes the Daily Money column and Wednesday’s Midweek Money section in i newspaper. He also writes for the news and business pages of the Independent and i newspaper and is a regular money commentator on TV station London Live. He has won numerous awards including Consumer Finance Journalist of the Year.
Thursday 29 November 2012
Accounting giant Ernst & Young is to be sued over the collapse of Anglo Irish Bank in 2009.
In what is the first time an Irish bank has taken legal action against its ex-auditor, the firm is being taken to court by the state-owned Irish Bank Resolution Corporation (IBRC), which took over the running of the collapsed Anglo three years ago.
While full details of the case have not been revealed, it is believed the accountant will be accused of failing to spot Anglo's massive exposure to the Irish property bubble, which led to it being nationalised.
Anglo has been under investigation for fraud for the past four years while three senior staff, including former chairman Sean FitzPatrick, are due to face criminal charges next year.
Ernst & Young has already faced a two-year industry investigation for its part in the scandal. Following that, former Irish comptroller & auditor general, John Purcell, said the firm failed to detect the scale of the bank's loans to the former chairman. The accountant contested Mr Purcell's claims, before the case was referred to the Chartered Accountants Regulatory Board.
Disciplinary hearings were halted pending the outcome of the criminal cases. IBRC refused to give full details of the new case. "As this matter is now the subject of litigation, it would be inappropriate for the bank to comment further," it said.
Ernst & Young said it was aware of the proceedings issued by the Irish bank but said it had not yet been served with proceedings, adding: "Without more detail it is difficult for us to comment further."
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