German watchdog hands EY two-year ban - report

EY has been banned from taking on listed companies as new audit clients in Germany for two years, it was reported on Monday.

The ban by Apas, the German accounting watchdog, is in response to work it carried out for disgraced payments firm Wirecard, according to Germany’s Handelsblatt and the Financial Times.

The Big Four firm and five current and former employees have also been fined up to €500,000 each, the FT noted, citing people familiar with the matter. The regulator has not made any formal decision over whether or not the firm acted with intent or negligence, however.

EY, which has co-operated with the watchdog during the probe, declined to comment until Apas issued a formal statement.

EY had audited Munich-based Wirecard for over a decade before its collapse in June 2020, when it emerged that half of its revenue and €1.9bn in cash did not exist.

Former chief executive Markus Braun and two other executives, Oliver Bellenhaus and Stephan von Erffa, are currently on trial in Germany on a range of changes including fraud. Braun, who has been in custody since the 2020 collapse, last month denied all wrongdoing when he appeared in court last month.

The whereabouts of former chief operating officer Jan Marsalek are currently unknown. The fugitive is on Europol’s most wanted list.