The consulting and auditing firm's Swiss practice is at the center of another major bankruptcy, where it faces investor claims. This follows criticism of EY over its role in now-defunct Wirecard.
U.S. hedge fund Lion Point Capital is suing EY Switzerland for $1 billion, alleging it issued clean audits and failed to act upon red flags at Zeromax while it audited the opaque company's books, the «Financial Times» (behind paywall) reports Monday.
Zeromax was a collection of Uzbekistani assets alleged to have ties to Gulnara Karimova that was headquartered in Zug, Switzerland before collapsing in 2010. Lion Point, which bought some debt out of Zeromax's bankruptcy estate, appears to be raising questions about EY Switzerland's work on Zeromax up to 2007.
The claim comes at a time when the consultancy firm is embroiled in legal battles in connection with Wirecard, the German fintech which crashed spectacularly last year. Wirecard and Zeromax sit uncomfortably with EY's strong presence in Germany, Austria, and Switzerland, where it is the external auditor at UBS and Raiffeisen.
