EY wins first Dax audit consumer since Wirecard scandal

Unlock Editor’s Digest without cost

Roula Khalaf, editor-in-chief of the FT, selects her favourite tales on this weekly publication.

EY has signed its first new Dax-listed audit consumer for the reason that collapse of funds group Wirecard, regardless of a ban on acquiring audit mandates from listed German corporations.

Qiagen, a biotechnology group listed in New York and Frankfurt, has employed the Large 4 firm as its new group listener from January, when he’ll change KPMG, which has held this mandate for a decade.

EY took on the mandate months after accepting a two-year ban on recruiting new German-listed audit shoppers following alleged breaches of its skilled obligations in reference to its audits of Wirecard, which collapsed in 2020 in one of many largest accounting scandals ever recorded in Europe.

The mandate of Qiagen, which has an annual turnover of two billion euros and a market capitalization of 10 billion euros, highlights the bounds of nationwide audit regulation in Europe.

Though Qiagen’s European operational headquarters is within the German city of Hilden close to Düsseldorf and the corporate is one among 40 members of Germany’s blue-chip Dax index, it’s included within the Netherlands, after having moved its headquarters to Venlo in 1996.

“We’re an organization included beneath Dutch legislation whose world shares are listed in the US on the New York Inventory Trade and likewise in Germany,” Qiagen stated in an announcement.

Germany’s audit watchdog Apas didn’t instantly reply to a request for remark.

The Wirecard fraud plunged EY Germany, which had been finishing up unqualified audits for the funds group for nearly a decade, into disaster. Regardless of repeated complaints from whistleblowers and demanding media protection, the corporate failed to grasp that 1.9 billion euros of money and half of Wirecard’s revenues had been faux.

After an investigation lasting a number of years, Apas concluded that EY’s audits had been “at greatest” negligent and, in some circumstances, grossly negligent, the Monetary Instances beforehand reported. Nevertheless, it has not been established whether or not the corporate acted with legal intent.

Qiagen informed the FT in its assertion that it had “carried out an intensive evaluate of the small group of worldwide audit corporations” that might work for it, given the requirement to satisfy US and European requirements.

The corporate added that shareholders “voted 99.9 p.c in favor” of EY at Qiagen’s final annual assembly in June. He formally instructed EY’s Dutch division, Ernst & Younger Accountants LLP, but in addition signed an engagement letter with the Large 4 agency’s German division.

Following the Wirecard scandal, EY misplaced a sequence of high-profile German audit shoppers, together with Commerzbank, Deutsche Telekom, DWS and state financial institution KfW, and did not win any new mandates even earlier than the The 2-year ban is formally starting to have penalties on this sector. 12 months.

The agency has overhauled its German authorized construction to separate auditing and consulting providers, sparking allegations from former Wirecard shareholders over potential asset stripping which they are saying will make it tougher, if not unimaginable, to implement claims for damages arising from its allegedly flawed audits of the defunct funds group.

Former buyers and Wirecard’s administrator are suing EY for billions of euros in damages in a sequence of gradual, drawn-out lawsuits whose outcomes stay unsure.

Folks accustomed to the matter informed the FT that EY was contemplating a sequence of extra high-profile audit mandates in Germany that will be out there from 2026, together with pharmaceutical and agrochemical group Bayer, retailer Metro and operator of Tui trip.

EY declined to remark.