That’s according to reports from Asia Sentinel. The liquidator of the now bankrupt Akai also, “extracted US$100 million from a local tycoon, Ho Wing-0n, who had allegedly conspired with the then chairman of Akai, James Ting, to strip the company of its assets. Ho himself was a former partner at Ernst & Young until 1990 and has been responsible for the Akai audit.”
Sounds like a nice little back-slapping/glad-handing/ass-grabbing arrangement and depending on how things progress, sounds like another one may be in place:
The size of the settlement against Ernst & Young reflects not only the size of losses sustained by Akai creditors but the years of organised sleaze attributable to Ernst and Young’s Hong Kong operation. If the civil settlements are not followed up by vigorous criminal prosecutions by the Hong Kong authorities, one can conclude that mutual back-scratching and old-boy principles override issues of corporate governance and the responsibilities of auditors.
As you may have noticed, we’re big fans of speculation so, for now, we’ll go along with whole HK Fuzz and auditors back-scratching scenario presented here if no criminal charges arise. E&Y has continually reiterated their willingness to cooperate in the investigation so you can make up your minds on what that all really means.
The liquidator, Borelli Walsh seems to be the catalyst of this case as the Sentinel speculates that if, “it been one of the other of the Big Four auditing firms it is likely that some clubby backroom deal would have been done which would have kept criminal activities well hidden and involved a settlement a fraction of that obtained by Borrelli Walsh.”
‘Clubby backroom deal’? You mean those are real? We’d be curious to know if E&Y in the States has even brought this up internally to address the press coverage. If those of you in the Ernstiverse are getting love letters from JT on this, kindly pass them along or discuss in the comments.
No Accounting for Accountants [Asia Sentinel]
We don’t know what to make of the raid at the E&Y offices in Hong Kong that occurred yesterday. We’d like to think that it was something out of 24 where Jack Bauer was “forced” into an impossible situation where he had to shoot a sheisty auditor in the leg to find out where the “certain documents” were.
Alas, it sounds as though it was considerably less dramatic, falling way short of anything worthy of the Absurd-o-meter.
The HK Fuzz probably even talked it over before going to the E&Y digs and said, “We’re going where? Accountants? We don’t even need our guns for this one. Let’s just take coffee and bagels and they’ll probably do whatever we ask.”
We’re probably not far off as E&Y was sure to reiterate their intent to ‘engage with and further investigations into the Akai matter’. Bor-ing.
Not that we were expecting much but it would have been nice that if just once we’d hear about accountants stonewalling some authority figures. Instead, the Head of E&Y China is stepping down, which is hardly the same as a vast conspiracy that may or may not involve the President of the United States. Sigh. There’ll be a next time soon enough.