Former Anglo Irish Bank sues Ernst & Young over its conduct leading up to Ireland’s bank collapse
First time an Irish bank has taken action against former auditors
The Irish Bank Resolution Corporation (IBRC) has reportedly sued its one-time auditors, the blue-chip accountancy firm Ernst & Young, over its conduct in the years leading up to the collapse of the bank in 2009.
Formerly Anglo Irish Bank, the IBRC launched its legal proceedings against the firm, one of Ireland's so-called 'Big Four' accountancy practices on Tuesday, The Irish Times reports.
It is reportedly the first time an Irish bank has taken legal action against its former auditors over their role before and during the financial crisis.
'These proceedings relate to the role of Ernst & Young as auditors to Anglo Irish Bank pre-nationalization,' an IBRC spokesperson said but declined to give details of the nature of the action.
'As this matter is now the subject of litigation, it would be inappropriate for the bank to comment further at this time,' the spokesperson added.
Ernst & Young replied that it could not comment on details of the bank’s action as it had not been served with the statement of claim, the legal document outlining the bank’s case against the firm.
'Although Ernst & Young is aware of proceedings issued on Tuesday evening by IBRC, we have not formally been served with nor have we received a statement of claim setting out the details of IBRC’s claim,' said the firm.
The accountants were replaced as the long-time auditors to the bank by Deloitte in 2009. The firm reportedly earned around $11 million in audit fees from the bank over a 10-year period.
The legal action by the IBRC is believed to be timed to meet a six-year legal time limit falling next week that would have blocked legal proceedings being taken by the bank.
The new proceedings follow a string of woes for the accountancy firm over its involvement with Anglo (now IBRC) which has cost the State $38 billion as a result of the property crash.
Ernst & Young was previously criticized by a special investigator over its conduct in the events surrounding the nationalization of Anglo in January 2009.
The former Comptroller & Auditor General John Purcell conducted a two-year investigation that saif the firm had failed to detect the scale of the bank’s loans to former Anglo chairman Sean FitzPatrick.
FitzPatrick had temporarily moved loans of up to $158 million off the books of the bank over its financial year-ends every September for eight years to conceal them.
Purcell said that Ernst & Young needs to answer its failure to refer to the September 2008 window-dressing transactions between Anglo and Irish Life & Permanent in the firm’s audit report on the first set of Anglo’s financial statements for the year to September 2008.
The accountancy firm contested Mr Purcell’s claims last year, saying that it 'fundamentally disagrees' with his view that it had a case to answer in three areas under his investigation.
The cases were reportedly referred to the disciplinary process of the Chartered Accountants Regulatory Board, but have been postponed at the request of the Director of Public Prosecutions pending the outcome of criminal cases against FitzPatrick and two other former Anglo executives.
- Nelson Mandela was against IRA decommissioning.
- Irish students told “No Irish Need Apply”...
- Bill O’Reilly slams Nelson Mandela as an...
- Racist incidents in Ireland up by 85 percent...
- Hollywood star Gabriel Byrne brands new Pope...
- Dubliner found guilty of vicious Temple Bar...
- Married priests could well be Pope Francis'...
- Unionists regret US envoy Haass’ call for...
- Top ten negative terms used to describe Irish...
- Are the Celts one of the ten lost tribes...
That is why many were left scratching their heads when occupy wall street were mad at the GOP.Bill O’Reilly slams Nelson Mandela as an unrepentant “communist”
Cupboard racist? Keeping minorities on welfare,accounting for over 65% of all wall street contributions, asking banks to lower standards, asking the mBill O’Reilly slams Nelson Mandela as an unrepentant “communist”
The normal propagandists at work below, most would say Mandela changed over his life, and if you read the article the author states such.Susan Boyle reveals she has Asperger’s syndrome, high functioning autism
When a boy, I stuttered very badly. I had a lot to deal with. At just turned 12 years old, my dad wanted to leave the town where we all had lived fo