EY files criminal complaint over leaking of classified Wirecard report
Firm pursues unknown sources who gave secret review on audit shortcomings to Handelsblatt
EY has filed a criminal complaint over a German newspaper’s publication of a classified parliamentary report into its work for disgraced payments company Wirecard.
The criminal complaint was submitted on Monday to Munich criminal prosecutors, the Big Four firm told the Financial Times. Prosecutors confirmed they had received the complaint but declined to comment further.
The highly critical report was written by Martin Wambach, a partner at accounting firm Rödl & Partner, on behalf of the parliamentary inquiry committee into the Wirecard scandal.
It highlighted serious shortcomings in EY’s auditing work, finding that the firm failed to spot indicators of fraud, did not fully implement professional guidelines and, on key questions, relied on verbal assurances from executives. The report cited more than 150 internal EY documents that were submitted to the committee but were deemed classified under German law.
A lawsuit from MPs who had asked the Federal High Court of Justice to allow the publication of an unredacted version of the report was dismissed in August. An appeal against that decision is still pending.
On November 11, Germany’s financial daily Handelsblatt published the full 168-page document on its website. It argued that the report, which is stamped “Deutscher Bundestag — Geheim”, was paid for by taxpayers and its content was of high public interest. Under German law, “Geheim” is the second-highest level of secrecy. People who hand over classified documents and are not authorised to do so can be punished with up to three years in jail.
In a statement on Monday, the Big Four firm said: “From EY’s point of view, handing over of the report [to Handelsblatt] constitutes a violation of the legal process, violates the highest court’s authority and creates a fait accompli.”
The firm argued that the rights of employees who were mentioned in the report, and whose names were not redacted by Handelsblatt, were violated. Moreover, the publication of the report unduly exposed EY’s business secrets, it said.
After the report, which came in two parts, was finished by Wambach in April and May this year, several newspapers including the Financial Times published stories about its content and cited specific parts. A person close to EY told the FT that Handelsblatt’s publication of the full document was “a completely different order of magnitude”.
EY said its criminal complaint was directed against the “unknown” people who leaked the document and did not target Handelsblatt journalists.
Kay Gottschalk, former chair of the Wirecard inquiry committee, which dissolved itself after publishing its report this summer, told the FT that he was “puzzled” by EY’s criminal complaint.
“I cannot imagine that members of the inquiry committee leaked the documents. We often experienced that journalists had access to confidential documents even before they were handed over to the committee,” the MP for the rightwing Alternative for Germany party said. Gottschalk also stressed that the protection of journalists’ sources was of the highest importance.
“Handelsblatt stands by its publication of the Wambach report,” the paper’s editor Sebastian Matthes told the FT, adding that it was journalists’ duty to hold political and financial power to account, to uncover deficiencies and to create transparency. “This is what we did with the publication of the Wambach report,” said Matthes, adding that the millions of investors who lost money over Wirecard had a “right to learn how this scandal could happen”.