E&Y fury after Hong Kong partner arrest
Ernst & Young has reacted furiously after one of its Hong Kong partners was arrested by anti-corruption detectives probing irregularities at a company based in Shanghai.
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The Big Four firm described the arrest of its partner, who has not been named, as ‘wholly unreasonable, unjustifiable and misconceived’ and said it was seeking legal advice.
The partner, one of 13 people arrested by Hong Kong detectives, has been released on bail while an inquiry continues into construction services company Global Trend Intelligent Technologies, led by the Independent Commission Against Corruption.
Their arrest is part of an inquiry into the company’s listing in 2002 and alleged irregularities in its accounts between 1999 and 2001.
‘It is against E&Y’s stated policy for any partner or staff to solicit or accept advantage from clients. E&Y’s partners and staff have clarified and confirmed that they did not accept any advantage in relation to the aforesaid services rendered and the ICAC has not presented any evidence to show that E&Y partners and/or staff have accepted any advantage,’ the firm added.
The firm confirmed it acted as auditors and reporting accountants in the listing of Global Trend in 2002, but was not involved in the preparation of any accounts nor in the trading of shares of Global Trend.
Ernst & Young said it had ‘absolute confidence in the integrity and professionalism of its partners and staff’, adding that it would cooperate with ICAC’s investigation of Global Trend.
Among those arrested were Global Trend chairman Xu Peixin and chief financial officer Lo Kwai Man.
Shares in Global Trend were suspended on Monday.