Ernst & Young has paid a "substantial" sum to settle a long-running court case over the collapse of the electronics company Akai. The accountancy firm, one of the industry's "big four", has suspended a partner who worked on the account.
The Hong Kong arm of the firm had denied allegations that it breached obligations as an auditor before Akai collapsed in 2000 owing $1.1bn. It also denied falsifying documents.
E&Y has agreed an undisclosed payment to the liquidator, Borrelli Walsh, after admitting that certain documents were not reliable, bringing the battle to an end.
The accountancy group said in a statement yesterday it had been "dismayed" following an internal investigation, which "made clear that certain documents produced for the audits in 1998 and 1999 could no longer be relied on due to the action of the audit manager in early 2000". Borrelli Walsh, which had sought hundreds of millions of dollars in damages, called it a "favourable outcome".Reuse content