Convoy scandal continues as Hong Kong firm seeks damages from Ernst & Young for 2013 audit
- Convoy and three other plaintiffs file writ of summons against accounting firm for alleged breaches related to its 2013 audit
- Ernst & Young has not provided a response after being contacted by phone and emails late Tuesday
Convoy Global Holdings, the centre of one of Hong Kong’s biggest financial scandals of the past decade, is suing its former auditor, Ernst & Young, for alleged breach of duty or negligence during its audit and advisory work six years ago.
The financial services group and three other related entities filed a writ of summons at the Court of First Instance on Monday, according to a filing by its solicitors, Lipman Karas.
The four parties are seeking unspecified losses and damages for alleged breaches related to the financial audit and certification work performed by the accounting firm in calendar year 2013. It did not elaborate on the allegations.
No one at the law firm responded to two phone calls after office hours. The firm did not immediately reply to an email seeking comment on the court filing.
An Ernst & Young spokesperson in Hong Kong has yet to provide a response. The company was contacted on phone and email by the South China Morning Post late on Tuesday. The firm resigned as Convoy’s auditor in February 2018, citing a disagreement on audit fees.
The Convoy scandal involved the movements of HK$4.043 billion (US$520 million) of funds related to a private placement of securities in 2015. The stock was suspended in December 2017 after the Independent Commission Against Corruption (ICAC) and the Securities and Futures Commission launched an investigation, raided Convoy’s office and arrested several of the group executives.