Evidence presented by accounting giant Ernst & Young in a negligence case is shot through with false and doctored documents, lawyers for the liquidators of electronics giant Akai Holdings, a former audit client of the firm, told the High Court yesterday.
Ernst & Young is fighting a US$1 billion negligence claim brought by the liquidators of Hong Kong-listed Akai, whose collapse 10 years ago with debts of US$1.1 billion shook the city and led to its chairman, James Ting, being imprisoned for two years before he was cleared on appeal.
On the opening day of the negligence trial on Wednesday, Leslie Kosmin QC, for the liquidators, claimed the accounting firm had doctored or falsified 80 audit documents after Akai's collapse to make it look like it had done more work overseeing the failed electronics firm's finances than in fact it had.
Yesterday, Kosmin said the liquidators' legal team had, overnight, discovered many more documents Ernst & Young had tampered with.
Kosmin said the doctored files 'permeated' Ernst & Young's defence and had been relied on strongly in statements from witnesses, including some of its current staff.
'These documents are in the pleadings, they're used by the defendant's expert in his report on behalf of Ernst & Young and they are also used by our expert, because we had to deal with them. They're relied on, with vigour, in the witness statements,' Kosmin said. He said an Ernst & Young partner, Edmund Dang, who worked on auditing Akai, appeared to have lodged a misleading witness statement with the court.