E&Y facing fresh £300m negligence claim
Ernst & Young took another battering yesterday after the Big Four firm was forced to fight a £300m negligence claim in the High Court, the Financial Times reports.
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A judge yesterday refused to throw out claims brought against the firm by a DaimlerChrysler subsidiary, Freightliner. The US-based truck builder alleges that E&Y failed to follow up on tip-offs over fraud.
‘There are real issues to be tried and Freightliner has real prospects of success on each of its claims,’ said Mr Justice Cooke. E&Y said it would defend the claim vigorously.
The alleged fraud took place at UK-based truck builder, ERF, where it is claimed that the company’s financial controller and company secretary fabricated financial records amounting to £294m.
Freightliner claims that E&Y not only failed to spot the alleged fraudulent activity, but failed to act on tip-offs from ‘independent third parties’.