The Hong Kong branch of accounting giant Ernst & Young, which in September l paid US$200 million to creditors of its collapsed former client Akai Holdings, has quietly settled another audit negligence case involving a failed local company.
Ernst & Young Hong Kong has paid to resolve a claim of between HK$250 million and HK$300 million that the liquidators of Moulin Global Eyecare had threatened to launch against it.
Moulin, which once claimed to be Asia's biggest manufacturer of eyewear, was wound up by the High Court in 2006 amid fraud allegations, owing lenders HK$2.7 billion. Ernst & Young was Moulin's auditor between 2002 and 2004.
The accounting firm declined to comment.
The eyewear firm's liquidator, Ferrier Hodgson, which also declined to comment, has consistently accused Moulin of fraudulently inflating its revenues.
The liquidator told creditors in private that one of Moulin's four biggest customers was really a Chinese restaurant in McCook, a town of 8,000 in Nebraska in the United States, people who attended the meetings said.
