Mon. Dec 6th, 2021


EY has filed a criminal complaint over a German newspaper’s publication of a classified parliamentary report on its work for the degrading payment company Wirecard.

The criminal complaint was lodged with Munich criminal prosecutors on Monday, the Big Four firm told the Financial Times. Prosecutors confirmed they had received the complaint but declined to comment further.

The highly critical report was written by Martin Wambach, a partner at the accounting firm Rödl & Partner, on behalf of the parliamentary inquiry committee into the Wirecard scandal.

It emphasizes serious shortcomings in EY’s audit work, which found that the firm failed to spot indicators of fraud, did not fully implement professional guidelines and, on key questions, relied on verbal assurance from managers. The report cited more than 150 internal EY documents submitted to the committee but classified under German law.

A lawsuit by MPs asking the Federal High Court of Justice to allow the publication of an unedited version of the report was fired in August. An appeal against this decision is still pending.

On November 11, Germany’s financial daily Handelsblatt published the full 168-page document on its website. It argued that the report, which was stamped “Deutscher Bundestag – Geheim”, had been paid for by taxpayers and that its contents were of great public interest. Under German law, “Secret” is the second highest level of secrecy. People who hand over classified documents and are not authorized to do so can be punished with up to three years in prison.

The Big Four firm said in a statement on Monday: “From EY’s point of view, handing over the report [to Handelsblatt] constitutes a violation of the legal process, violates the authority of the Supreme Court and creates an established fact. ”

The firm argued that the rights of employees mentioned in the report, whose names were not edited by Handelsblatt, were violated. In addition, the publication of the report unnecessarily exposed EY’s business secrets, it said.

After the report, which came in two parts, was completed by Wambach in April and May this year, several newspapers including the Financial Times published stories about its contents and quoted specific parts. A person close to EY told the FT Handelsblatt’s publication of the complete document was “a completely different order of magnitude”.

EY said his criminal charge was against the “unknown” people who leaked the document and did not target Handelsblatt journalists.

Kay Gottschalk, former chairman of the Wirecard Investigation Committee, which dissolved after the publication of its report this summer, told the FT that he was “surprised” by EY’s criminal complaint.

“I can not imagine that members of the investigation committee leaked the documents. “We often experienced that journalists had access to confidential documents even before they were handed over to the committee,” said the MP from the right-wing Alternative for Germany party. Gottschalk also stressed that the protection of journalists’ resources is of the utmost importance.

“Handelsblatt stands by the publication of the Wambach report,” the newspaper’s editor Sebastian Matthes told the FT, adding that it was journalists’ duty to hold political and financial power accountable, to expose shortcomings and to create transparency. “This is what we did with the publication of the Wambach report,” Matthes said, adding that the millions of investors who lost money on Wirecard had a “right to learn how this scandal could happen”.



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