Claim against auditor Deloitte in Nyrstar case
- Kris Vansanten
- Dec 11, 2023
- 2 min read
The minority shareholders of Nyrstar NV submitted a claim against Deloitte for its role in enabling and covering up the allegedly fraudulent 'restructuring' (read: acquisition by Trafigura for 0 euro) back in 2019.
According to this article from Bert Broens in De Tijd, the circumstantial claim provides many detailed facts and allegations confirming wrongdoing, gross negligence and even criminal offences committed by Deloitte, the world's largest audit firm.
We vividly remember how the auditor of Deloitte, back in 2019, acting in its capacity of auditor of Nyrstar NV, during several subsequent General Assemblies refused to answer correctly, or did so misleadingly or evasively, to the many questions asked to her by the worried shareholders present at those meetings.
However, isn't an auditor's role to inform the General Assembly of shareholders correctly and transparently on his findings, and isn't it vital for the trust of investors in the well functioning of the capital markets that they can rely on the work done by their auditor (total fees charged by Deloitte to Nyrstar in 2019 exceeded € 5 million)?
Shouldn't it be such that the auditor of a stock quoted company (in the case of Nyrstar: the second largest zinc smelter in the world, one of the few remaining industrial jewels and active in the sector of strategic commodities for Europe's industry) raises the flag in clear, straightforward statements not to be mistaken - and even pro-actively informs the regulatory body thereof?
Instead, what we observed back in the days that Trafigura completed its hold-up in broad daylight on the company, was an auditor shaken by the events, uncapable of given a straight answer on even the most straightforward questions about the likelihood of fraud, the confirmity of the commercial contracts between Trafigura and Nyrstar with the relationship agreement, requiring them to be at arm's length, instead looking for each question at its lawyer who was acting in an emperor-like way, nodding 'yes' or 'no' and providing his insights as to what had to be said - mostly unmeaningful, misleading and evasive answers. We also vividly remember that the auditor did not react nor intervene when Nyrstar's Chairman, Martyn Konig, made untrue statements on the arm's length character of the relationship between Trafigura and Nyrstar.
Such behavior is detrimental to the trust of investors and minority shareholders in the rule of law and in the well functioning of the capital markets, and leads to impunity on the side of reference shareholders and disfunctional boards.
We have seen the detrimental impact thereof in other cases like Enron, Lernout & Hauspie, Wirecard, TSX and many others.
Time to call auditors and other professional services firms who play an important role in the design, enabling and covering up of white collar fraud schemes to justice?
