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Injunction lifted to reveal E&Y appeal against Equitable ruling

Ernst & Young is to appeal a decision of the accountants’ disciplinary
body over its audit of Equitable Life.

The Accountants Joint Disciplinary Scheme revealed the latest news in the
Equitable saga today (Monday) after an injunction blocking news of the appeal
was discharged in the High Court.

The appeal will be heard in October this year. The initial findings against
the firm and McNamara will remain unpublished and under wraps until the appeals
process is completed.

A spokesman for E&Y said: ‘We cannot comment on the provisional findings
of the Joint Disciplinary Tribunal of the ICAEW (“JDT”) other than to confirm
that we have appealed certain aspects and that the eventual findings of the
Appeal Tribunal will be made public in due course.

‘After taking legal advice in December, we sought to keep confidential these
provisional findings, when the JDT proposed to disclose them to a third party.
We have now agreed, through the Court, a way forward.’

The injunction was lifted after being in place since an application by Ernst
& Young in December last year. The action also prevented the tribunal of the
JDS from acknowledging that there was a legal block on publishing information on
its investigation.

The executive committee of the JDS began a challenge to the injunction on
Friday last week. The High Court discharged the injunction today.

The disciplinary case against Ernst & Young over Equitable began in 2004
when complaints were brought by the profession’s disciplinary body.

The complaints alleged that E&Y delivered unqualified audit opinions when
the accounts for 1990 to 1993 had not been properly prepared, and that
unqualified opinions were offered on accounts, which did not represent a ‘true
and fair view’, from 1994 to 2000.

The firm and McNamara were also accused of failing ‘to act with the
objectivity and independence which is expected from a firm of chartered
accountants and from chartered accountants’

Complaints against another partner, Richard Coombes, were dropped because of
ill-health.

A negligence claim brought by Equitable against its auditors collapsed in
December 2005 after being comprehensively dismantled by E&Y’s lawyers in
court.

The initial action sought up to £4.5bn from former directors and the
auditors.

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