Danger, Unexploded Audit Equitable Life's [Pounds]3.75bn Court Actions Against 15 Former Directors and Ernst & Young for Failing to Defuse a Financial Time-Bomb Have Potentially Shattering Implications. Simon Bain Investigates

Summary

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CAN a company's former auditors and non-executive directors save themselves from bankruptcy by claiming they were not responsible for unexploded financial "bombs" waiting to go off?

The issues are so explosive that the High Court may take up to nine months to decide the answer, now that Equitable Life's [pounds]3.75bn court actions against former auditors Ernst & Young and 15 former directors have today entered their fourth week as the UK's biggest-ever civil lawsuit.

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Danger, Unexploded Audit Equitable Life's [Pounds]3.75bn Court Actions Against 15 Former Directors and Ernst & Young for Failing to Defuse a Financial Time-Bomb Have Potentially Shattering Implications. Simon Bain Investigates

Equitable's surviving 750,000 policyholders will be hoping for a cash transfusion into the sickly society, rather than a crippling costs bill if the case fails. Those who have left Equitable the poorer, or are trapped with falling annuities, will note the strong whiff of double standards about Equitable's behaviour towards the victims of the crisis and towards its perpetrators.

The 1350 pages of pre-trial evidence, made available by Mr Justice Langley, detail the alleged failures of the society's then board and auditors to defuse Equitable's potential [pounds]1.5bn black hole of guaranteed annuity rate (GAR) liabilities. Although executives had created the problem...

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