Status: 10.12.2021 2:17 p.m.
The Munich Higher Regional Court doubts the procedure of the lower court, which dismissed all claims by Wirecard investors against the auditor EY. According to experts, this paves the way for an amicable solution.
Wirecard investors can now hope for damages claims against the auditing company EY. For years it had audited the wrong balance sheets of the former DAX company – although there were repeated indications of irregularities.
In fact, in a preliminary notice, the Munich Higher Regional Court expressed serious doubts about the decisions of the first instance. The Munich regional court had dismissed all lawsuits – over 100 in number – against EY without further taking of evidence. According to the OLG, the regional court should have examined much more precisely whether EY was deliberately acting immorally. In particular, the Senate complains that the district court probably lacks “own expertise” in order to assess the allegations made against EY in an opinion by the auditing company KPMG. According to the OLG, an expert opinion would have been appropriate for this.
Open model proceedings
In addition, the OLG accuses the regional court of having ignored the report of the Wirecard investigative committee in the Bundestag – the so-called Wambach report. Because the report written by Martin Wambach gave the EY examiners a disastrous certificate: It accuses them of having overlooked numerous warning signals and not investigating other anomalies.
The OLG therefore recommended the regional court to open a model case. The OLG is also considering referring the proceedings back to the regional court in order to catch up on the previously missing evidence. The preliminary information does not mean, however, that the OLG considers the auditors of EY to be jointly responsible in every case or that the success of the lawsuits against the auditing company is now guaranteed. However, the reproach stirs up hope among the cheated Wirecard shareholders that they will be able to file lawsuits against the auditors again.
Amicable solution required
According to their own information, the shareholder protectors of the German Protection Association for Securities Possession (DSW) have already registered 40,000 investors who want to take legal action against EY. It could be in January. Some institutional investors have already announced that they will take action against the auditors. Wirecard’s insolvency administrator Michael Jaffé could also sue EY.
Because the question is whether EY made mistakes, and if so, how difficult they were, said the lawyer commissioned by Jaffé, Martin Jonas. The answer depends on whether and to what extent EY has to be liable. What is certain is that huge sums of money are involved – after all, the shareholders suffered losses in the double-digit billions due to the collapse of Wirecard.
“Everyone has to bleed”
Because claims for damages in this amount would threaten the existence of EY, experts such as the renowned Frankfurt lawyer and Vice President of the DSW, Klaus Nieding, rely on an amicable solution. It is true that one should not “overestimate” the decision of the OLG, but no one could have an interest in EY disappearing from the market, neither the auditors themselves nor the German economy, so Nieding at the request of tagesschau.de. Because then only three of the currently four dominant auditors would be left.
Nieding is therefore hoping for a “sensible solution” in which all those involved – that is, the Wirecard shareholders, EY, the private sector and perhaps the government – can participate. “Everyone has to bleed,” says Nieding. The aim of this concerted action is to save EY. It is important, however, that this decision is made quickly and not after 20 years as in the lawsuit against Deutsche Telekom. “Because every year in which there is no solution, EY loses mandates,” says Nieding. The question remains whether Deutsche Bank will continue to use EY as its auditor in the coming year. It is also in the interests of the economy and of course the deceived Wirecard shareholders that a solution should be found “quickly”.