This decision is likely to upset many Wirecard victims. The Federal Court of Justice (BGH) has decided that a bank can continue its lawsuit against the auditing firm EY without having to wait for the outcome of the major Wirecard test case. This is piquant because when the capital investor model procedure was started four years ago, over 9,200 lawsuits from Wirecard shareholders with a claim volume of 1.9 billion euros were suspended before the Munich regional court and have been in limbo ever since.
This is criticized by lawyer Marc Liebscher, who represents the Wirecard model plaintiff with lawyer Wolfgang Schirp. Liebscher told the FAZ: “Wirecard investors get stones instead of bread. They get the devastating impression that a bank gets to its goal faster while they have to wait.”
What did the Wirecard auditors do wrong?
The bank, whose name is not mentioned in the BGH press release of March 5th, is reportedly the Raiffeisenlandesbank Oberösterreich. She had given Wirecard AG a loan before the former DAX company collapsed into bankruptcy in 2020. After Wirecard’s insolvency almost six years ago, the Austrian credit institution sued the EY auditor, who was then responsible for auditing Wirecard’s balance sheets, for damages. The accusation: EY seriously violated its obligations when auditing Wirecard AG’s annual and consolidated financial statements. The Landesbank is not commenting on this because it is an ongoing procedure. EY also does not comment on the BGH decision.
When the investor model procedure in the Wirecard complex started in 2022, not only thousands of investor lawsuits were suspended, but also the lawsuit from Raiffeisenlandesbank Oberösterreich. They defended themselves against the time-consuming suspension and were now granted the right by the Federal Court of Justice (file number III ZB 22/24). She can therefore continue her claim for damages before the Munich I Regional Court.
Hanging out for Wirecard investors
The current BGH decision of February 26th did not clarify the controversial question of whether an auditor’s report is public capital market information within the meaning of the Model Procedure Act. This is also the question that is at stake in the large capital investor model procedure. The Bavarian Supreme Regional Court, which is responsible for the model case, had decided that auditors’ statements do not belong in the model case. This partial model decision is not yet legally binding. The Federal Court of Justice has to clarify this, which will further prolong the hanging situation for Wirecard investors. “Delayed legal protection is not legal protection,” warns investor lawyer Liebscher.
What happens next with the sample procedure? At the end of January, the Bavarian Supreme Regional Court expanded the process, particularly with regard to former Wirecard boss Markus Braun, to include the question of whether the controversial third-party business was misrepresented in Wirecard’s balance sheets from 2014 to 2018. The court had already rejected numerous applications for extensions from those invited and the model plaintiff, but it still has to decide on others.
According to lawyer Liebscher, the first priority is to explain to the court in detail, in 53 points, what the investors want to be determined about the third-party business. The Senate has given the plaintiffs a deadline of the end of March to do this. “The justifications deal with important interface questions that not only affect Markus Braun’s liability but also the EY auditing firm,” says Liebscher. This is important because Braun’s liability is of little economic importance. Claims against EY are mainly of economic importance.
According to Liebscher, the legal arguments regarding the allegedly incorrect accounting of Wirecard’s third-party partner business and its flawless attestation by EY could also be used for the original claims for damages if the Federal Court of Justice were to confirm the decision that accounting attestations in the test case were not permissible. It is not possible to predict when the Federal Court of Justice will decide.
