, 8:16, Sunday 4 December 2011
Accountant Ernst & Young is facing an allegation of corruption at one of its global headquarters as part of a whistleblowing case brought by one of its ex-managing partners.
The allegation is made in a High Court case brought against the Big Four accountant by former employee Cathal Lyons. The ex-E&Y partner claims he was dismissed from the company and had hundreds of thousands of pounds worth of medical cover withdrawn after he reported the alleged corruption to the practice’s director of global tax.
Mr Lyons’ claim in the High Court relates to his employment by E&Y’s Russian practice.
In 2006 he suffered a serious road accident resulting in permanent disabilities and partial amputation. Despite suffering serious medical complications Mr Lyons continued to work for Ernst & Young, albeit in a reduced capacity, until he claims he was dismissed in 2010.
Following his dismissal, the medical insurance cover provided by Ernst & Young was withdrawn. Mr Lyons claims this was in direct breach of an agreement he had reached with E&Y that he would be covered by the medical insurance for life.
His dismissal and the subsequent removal of his medical insurance were a direct result of him reporting his concerns about corruption, he claims.
The writ states the actions taken against Mr Lyons came from “personal animosity against him rising from a discussion in late 2010 between the claimant and Maz Krupski (Ernst & Young’s director of global tax and statutory) regarding alleged corruption by the practice.”
Specific details behind the alleged corruption have not been spelled out in the writ. However The Sunday Telegraph understands details have been passed to E&Y’s global headquarters in London.
It is not certain whether the report was made as part of the current case or by a separate whistleblower.
E&Y’s Russian operation has not been without its problems. The practice was the subject of multi-million tax dispute in 2008. The case ended up in court, a hearing which E&Y won.
An E&Y spokesman said: "Ernst & Young are confident that there is no substance whatsoever to this vague and unsubstantiated allegation of some supposed wrongdoing. These employment related proceedings will continue to be vigorously contested."
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