Ernst and Young, an international consultancy and advisory firm which goes by the initials EY, faced a damages claim on Friday in relation to their approval of the annual accounts of the collapsed Wirecard payment service provider.

The German shareholders' association DSW, which acts in the interests of shareholders, said the legal action had been lodged at the Munich district court on Friday.

Institutional and private investors are claiming compensation of more than €700 million ($772 million) from Ernst and Young.

The costs for the case are being put up by British litigators, who will receive a share of the proceeds if the action is successful.

The DSW class action lawsuit before the Bavarian regional court aims to clear up the main issues and provide the basis for further legal action.

The respondents include former Wirecard managers and EY, which approved the Wirecard accounts over several years.

Former Wirecard execs on trial

Wirecard, which was listed on Germany's leading DAX index, collapsed in the summer of 2020 after about €1.9 billion allegedly held in Southeast Asian escrow accounts could not be traced.

Many of Wirecard's key executives have been on trial facing accusations of fraud, including its former chief executive, Markus Braun, who has been on trial in Munich for fraud, for the past year.

Only last week, Wirecard's former chief financial officer (CFO), Burkhard Ley, faced charges of commercial and gang fraud, market manipulation, misrepresentation and breach of trust.

As CFO, and later as an adviser to the board, Ley, together with Braun and other top managers, is accused by prosecutors of manipulating sales by helping to fabricate the alleged multibillion-dollar business with third-party customers in Asia.

They said the incorrect figures were intended to drive up the price of Wirecard shares, while the manipulated annual financial statements served to raise money from banks.

In total, the damages amounted to several hundred million euros.

Ley's lawyers rejected the accusations as unfounded and said he had left the company before the main events of the scandal unfolded.

mds/sri (dpa, Reuters)