Fresh crisis for E&Y
Ernst & Young's month from hell continued this week after the head of its Swiss firm left amid allegations of insider trading.
Link: M&A partner cull at Ernst & Young
E&Y was quick to distance itself from Marcel Maglock, chief executive of its Switzerland business, and issued a statement saying: ‘The charges do not involve any audit clients of the firm and E&Y is cooperating fully with the investigation.’
The news follows last week’s High Court decision, which gave DaimlerChrysler permission to sue the firm for £300m in connection with fraud at truckmaker ERF.
ERF was bought by German manufacturer Man in January 2000, but the group soon discovered that the company was facing a liquidity crisis.
As a result it sued DaimlerChrysler, which bought the original owner of ERF, Western Star, in 2000.
In turn DaimlerChrysler is suing E&Y, Western Star’s auditor at the time.
Stephen Ellis, the financial controller at ERF, who has now been dismissed, issued a statement admitting details of the accounting irregularities in which he was involved. Man refused to comment on the statement.