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PwC Ireland sued for €1bn over Quinn audit

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30th Jul 2013
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PwC Ireland is being sued by the joint administrators of Quinn Insurance Limited for €1bn over alleged negligent auditing.

The Irish insurance company went into administration in 2010, after the financial regulator expressed concern over finances of the company and how it was being run.

Michael McAteer and Paul McCann of Grant Thornton were then appointed as joint administrators and sold most of the company, except healthcare, in a deal involving US Liberty Insurance in 2012.

Former auditor PwC confirmed that an application for the administrators to take the action to the Irish commercial court had been approved, and said the case would be “vigorously defended”.

The administrators claimed that PwC didn’t do enough to ensure that Quinn Insurance had enough reserves and was negligent in its audit work.

A spokesperson for the Big Four firm said it had consented to the application, but the proceedings were “unjustified and devoid of merit”.

“The affidavit, accompanying the application, contains factual inaccuracies, misrepresentations of the facts and assertions with which we fundamentally disagree.

“The circumstances behind the proceedings are complex and technical and involve many interrelated parties, including the joint administrators themselves.

“We stand by the quality of our audit work and we will vigorously defend these proceedings,” they said.

Last month, the administrators received permission from the president of the High Court of Ireland to bring proceedings against PwC.

To meet claims against the insurer, they were also consented to draw down €1.12bn (£966m) from the Irish Insurance Compensation Fund.

PwC is not the only Big Four firm to be sued in connection with the Quinn family empire’s demise.

EY is also being sued over its role in the Quinn family-owned Anglo Irish Bank, which collapsed in the wake of the financial and property crash in 2009 and is the first time an auditor is being sued over its role in the crisis in Ireland.

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