THE FORMER AUDITORS OF Quinn Insurance plan to “vigorously defend” an action taken against them in the Commercial Court.
The joint administrators of Quinn Insurance, Grant Thornton, are suing the firm’s former auditors, Pricewaterhouse Coopers (PWC), for €1 billion over alleged negligent auditing.
Justice Peter Kelly granted an application for the case to be fast-tracked to the Commercial Court today with PWC consenting to proceedings.
However in a statement issued this afternoon, PwC Ireland said: “These proceedings are unjustified and devoid of merit.”
The administrators are taking the proceedings because, they argue, certain guarantees provided by the former owner of Quinn Insurance, the bankrupt businessman Seán Quinn, were not sufficiently examined by PwC.
The administrators also believe that the insurance arm of the Quinn empire did not have sufficient reserves but PwC says the the administrators’ affidavit “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,” the PWC statement added.
Quinn Insurance was placed into administration in 2011 when it was estimated that it would cost the taxpayer some €738 million, but that figure has since risen to an estimated €1.6 billion.
The State’s controversial Insurance Compensation Fund sees a two per cent levy imposed on all home, motor and commercial insurance policies in the country in order to fund the administration of the insurer which was once the country’s largest.
Seán Quinn, whose business empire collapsed with the onset of the recession, has said that the business was placed into administration unnecessarily describing the estimated cost as “truly shocking”.
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