Germanys Alipay scandal fermentation supervision believes that Ernst & Young is suspected of criminal offences.

category:Finance
 Germanys Alipay scandal fermentation supervision believes that Ernst & Young is suspected of criminal offences.


The share price of wirecard fell 60% on the day of the announcement, and the market value of 100 billion yuan fell by 99% in less than 10 days. A generation of payment Empire disappeared in a flash, which can be called tragic, and has become one of the biggest scandals in German business this year.

Ernst & Youngs real trouble is here

APAss report is the first time that German government agencies have stated that Ernst & Young is suspected of committing a crime in this incident. The Financial Times reported that for Ernst & young, the move puts it directly at great legal and reputational risk.

The report quoted Munich prosecutors as saying they were assessing the report submitted by APAs and had not yet reached a specific conclusion. Prior to this, German prosecutors did not start criminal investigation into the in-service and former employees of Ernst & young.

Geschonneck told members present that they had asked Ernst & young to confirm that they followed the normal process of checking wirecard bank accounts, but ey did not confirm. He said:

No account information, no bank documents. From 2016 to 2018, there was nothing.

What we (the task force) did was not to study how to build rockets (it was a very simple job), but (ey) did not.

Ey expressed strong opposition

APAs said in its report that there is evidence that ey may have violated due diligence and reporting obligations in the wirecard audit. Under German law, auditors face up to three years in prison if they do.

With regard to APAss suspicion of criminal activities, ey issued a statement saying it was strongly opposed:

Based on our current understanding, our colleagues conducted the audit with professionalism and integrity.

In the case of wirecard, Ernst & Youngs auditors were absolutely free from any criminal activities.

In its response at the end of June, ey also mentioned that this was a well-designed fraud involving multiple institutions around the world. Even with the most powerful audit procedures, it was impossible to detect such fraud.

However, it should be noted that at that time, there were media reports that wirecard claimed to have a deposit of 1 billion euro in the overseas Chinese Bank of Singapore, while Ernst & Young did not ask for account information from the bank for three consecutive years.

According to the report, Ernst & Young has relied on documents and screen shots provided by third-party trustees and wirecard for deposit confirmation from 2016 to 2018. Therefore, in this case, ey may be responsible.

OCBC has said that wirecard has no business relationship with it, the company has not opened any escrow account in the bank, and they have not received any inquiry about wirecard from Ernst & Young from 2016 to 2018, which makes the incident more complicated.