GRANT THORNTON administrators have filed papers to sue PwC for €1bn (£865m) for its role in auditing collapsed Irish insurance company Quinn Insurance.
Michael McAteer and Paul McCann were appointed joint administrators to Quinn Insurance in 2010 when the firm collapsed.
The pair have filed a claim accusing PwC auditors of negligent auditing. They claim that Quinn Insurance could have avoided significant losses had PwC highlighted deficiencies seen in company accounts, Reuters reports.
Losses at Quinn are expected to cost the Irish Insurance Compensation Fund up to €1.6bn, it has also led to the introduction of a 2% levy on all home, motor and commercial insurance policies since its collapse, The Irish Times reports.
PwC has hit back accusing the administrators’ claim of containing “factual inaccuracies” and “misrepresentations of the facts”.
“We stand by the quality of our audit work and will vigorously defend these proceedings.
“The affidavit, accompanying the application , contains factual inaccuracies, misrepresentations of the facts and assertions with which we fundamentally disagree.
“The circumstances behind the proceedings are complex and technical and involve many interrelated parties, including the Joint Administrators themselves.”
The Grant Thornton administrators allege that Quinn Insurance significantly underestimated the level of reserves available to cover future claims during audits undertaken between 2005 – 2008, The Financial Times reports.
It is expected that should any funds be awarded it will be used to repay the government which advanced the company more than €1bn.
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