Unlock the Editor’s Digest totally free
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
EY has signed up its first new Dax-listed audit shopper for the reason that collapse of funds group Wirecard regardless of a ban on successful auditing mandates from listed German firms.
Qiagen, a biotech group listed in New York and Frankfurt, has employed the Large 4 agency as its new group auditor from January, when it would substitute KPMG, which has held the mandate for a decade.
EY took on the mandate months after accepting a two-year ban on taking over new listed audit purchasers in Germany following alleged violations of its skilled duties in its audits of Wirecard, which collapsed in 2020 in considered one of Europe’s greatest ever accounting scandals.
The mandate from Qiagen, which has €2bn in annual revenues and a market capitalisation of €10bn, highlights the restrictions of nationwide audit regulation in Europe.
Whereas Qiagen’s European operational headquarters is within the German city of Hilden close to Düsseldorf and the corporate is among the 40 members of Germany’s blue-chip Dax index, it’s integrated within the Netherlands, having moved its authorized headquarters to Venlo in 1996.
“We’re a Dutch integrated firm with world shares listed within the US on the NYSE and in addition in Germany,” Qiagen stated in an announcement.
German audit watchdog Apas didn’t instantly reply to a request for remark.
The Wirecard fraud plunged EY Germany, which had issued unqualified audits for the funds group for nearly a decade, into disaster. Regardless of repeated whistleblower complaints and significant press protection, the agency missed that €1.9bn in company money and half of Wirecard’s income have been faux.
After a multiyear investigation, Apas concluded that EY’s audits had been “on the very least” negligent and in some circumstances grossly negligent, the Monetary Occasions beforehand reported. Nonetheless, it didn’t set up whether or not the agency had acted with prison intent.
Qiagen instructed the FT in its assertion that it had “carried out a radical evaluation of the small group of worldwide audit companies” that would work for it, given the requirement to fulfill each US and EU requirements.
The corporate added that shareholders “voted 99.9 per cent in favour” of EY at Qiagen’s newest annual assembly in June. It formally mandated EY’s Dutch division Ernst & Younger Accountants LLP but it surely additionally signed an engagement letter with the Large 4 agency’s German unit.
Following the Wirecard scandal, EY misplaced a collection of high-profile German audit purchasers, together with Commerzbank, Deutsche Telekom, DWS and state-owned lender KfW, and didn’t win any new mandates even earlier than the two-year ban formally began to chew this yr.
The agency has overhauled its German authorized construction to separate audit and consulting companies, resulting in allegations from former Wirecard shareholders over potential asset stripping that they declare will make it more durable if not inconceivable to implement injury claims over its allegedly flawed audits of the defunct funds group.
Former traders and Wirecard’s administrator are suing EY for billions of euros in damages in a collection of slow-moving and long-running lawsuits whose outcomes stay unsure.
Individuals acquainted with the matter instructed the FT that EY was pitching for a collection of extra high-profile audit mandates in Germany that may develop into obtainable from 2026, together with pharma and agrochemicals group Bayer, retailer Metro and vacation operator Tui.
EY declined to remark.
