Ernst &Young in Akai payout

ERNST &amp; Young (E&amp;Y) was forced to make a &ldquo;substantial&rdquo; payout to the liquidator of failed consumer electronics firm Akai Holdings yesterday, after being accused of falsifying documents in a long running court battle.<br /><br />The Big Four accountancy firm has made a settlement to Hong Kong liquidator Borrelli Walsh after it admitted documents it used as evidence in court could not be relied upon.<br /><br />Borrelli had accused E&amp;Y, which was auditor to Akai before it failed, of doctoring over 80 documents going back over a decade to give the impression there was a proper audit trail.<br /><br />The $1bn (&pound;612m) case, brought in the Hong Kong High Court in 2004, had started with an accusation of negligence but culminated in falsification claim last week.<br /><br />E&amp;Y denied allegations it breached obligations as an auditor before Akai collapsed in 2000 owing $1.1bn. It also denied falsifying documents. But it did admit certain documents were not reliable.<br /><br />E&amp;Y said yesterday it had suspended a partner, who was the audit manager for Akai based in Hong Kong over the matter.<br /><br />It said it had concluded that documents produced for audits in 1998 and 1999 could no longer be relied upon.<br /><br />The firm could face fines by the Hong Kong Institute of Certified Public Accountants and the UK&rsquo;s Financial Reporting Council, who are likely to investigate the matter. <br />