Tuesday, September 29, 2009

Police Raid Ernst & Young HK Office in Akai Case

We highlight a breaking news story happening on the other side of the world, in Hong Kong the police yesterday raided the offices of Ernst & Young, the erstwhile auditors of Akai. Akai was the largest corporate collapse in Hong Kong, with similarities to the Enron case in the United States. This story is making current headlines in the small city state, making the first page of the influential South China Morning Post and also reported on Bloomberg Asia and Bloomberg.com’s home page today. 


4 comments:

Anonymous said...

This not a new incidence for EY HK. New China Hong Kong of which EY was the auditors some years ago was another case that we were unable to know the details and final settlement.NCHK was liquidated and in the High Court, the liquidators(CCIF) asked the then EY chairman Anthony Wu whether he had traded stocks through NCHK's broker firm. Wu's answer was negative but the liquidators showed ledger accounts evidencing Wu did traded stocks through the broker firm. Wu also signed audit report of NCHK of which Wu was one of bank authorized signatories of NCHK. What is independence? The case was settled without too much public notice. Wu resigned as chairman and partner of EY subsequently. This move was suspected a deal to close the case but is it fair to the profession? It is unbelievable that a senior partner of Big 4 is personally involved in an audit and signed the audit report. What has HKICPA done in this case. Perhaps it is life, Wu is now a hot guy, he is Chairman of the Hospital Authority. Is the Government blind to this incidence or there is nobody to fill the post?

MissIveniv said...

SCMP identified suspended partner being Edmund Dang, an audit manager of E&Y at the time of the audit in question (Although this information has not been officially confirmed by Ernst & Young), pending completion of internal investigation.

Anonymous said...

The partner arrested, Dang, was only an audit manager at the time of the fateful Akai audit. Seems he is merely a gimp for the other partners who were culpable. I suspect he will start singing when a spell in Stanley prison becomes a reality. I think Ernst & Young are getting their just desserts having done their utmost to frustrate the liquidators over the past few years with court action after court action.

Anonymous said...

Surely the managing partner at that time must bear most of the responsibility for this - especially as he would have pulled in most of the share of the profits and it would have been on his watch. Why should the current partners be financially responsible ?