(Bloomberg) -- A Munich court opened a class-action style procedure against Ernst & Young LLP to jointly hear cases brought by Wirecard AG investors who claim the firm violated its duties when auditing the now bankrupt payment company.
The ruling was issued on Monday, German law firm Tilp said in an emailed statement. Tilp had filed the individual suits shortly after the Wirecard scandal broke two years ago and sought to open the mass case to combine them under this procedure. The plaintiffs are Wirecard share- and bondholders.
EY said it's considering an appeal as other judges from the same tribunal had rejected similar bids because audit reports aren't covered by the class-action procedure. The Munich appeals court already ruled that investor cases have a slim chance of success since they must prove intent, EY said, adding that its auditors worked “to the best of their knowledge and conviction.”
Wirecard collapsed in June 2020 after saying that 1.9 billion euros ($2.1 billion) in cash listed on its accounts probably never existed, sparking a clutch of probes and a parliamentary inquiry into one of the country's biggest-ever corporate scandals. Munich prosecutors said yesterday hat they charged Wirecard's former Chief Executive Markus Braun who is also being sued by Wirecard investors.
The case is: LG Muenchen, 3 OH 2767/22 KapMuG.
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