HONG KONG’S markets regulator is taking Ernst & Young to court in an attempt to force it to hand over accounting records related to a former China-based client.
In an unexpected move, the Securities and Futures Commission (SFC) commenced proceedings against E&Y for failing to produce records that relate to its work as the reporting accountant and auditor for Standard Water.
The SFC issued a formal notice to E&Y seeking the audit working papers and underlying accounting documents relating to former client Standard Water.
According to the SFC, Ernst & Young did not comply with the request and claimed it did not have the relevant records which were held in the mainland by its joint venture partner, Ernst & Young Hua Ming, whose staff were the ones involved in the engagement.
“Given Ernst & Young was the reporting accountant and EY Hua Ming was Ernst & Young’s agent, the failure to produce these records to the relevant mainland authority on the SFC’s request is a matter of serious concern,” the SFC said.
In a statement, E&Y said it will endeavor to fully comply with the SFC.
“We will work closely with the relevant regulators, and trust that there will be a quick resolution to enable our full compliance with applicable laws and regulations,” E&Y said.
As legal proceedings are underway, E&Y added it would be inappropriate to comment further.
Partner at Pinsent Masons says Serious Fraud Office has secured 'one of the top ten enforcement actions of all time'
Carolyn Brown appointed as the first head of client legal services practice RSM Legal
The established building and heritage restoration company has ceased trading following the loss of major tenders
After a seven-year saga, a result has been reached between Margaret May and CIMA over misconduct