EY's Alleged Negligence Rocks Luxembourg's Financial System. Billions at Stake as Legal Deadline Looms.


  • Author Anthony Baker
  • Published June 9, 2024
  • Word count 999

The Luxembourg financial world has been shaken by a scandal of considerable proportions, with the well-known accounting firm Ernst & Young (EY) at its center. The alleged negligent management of Ixellion SA, a company with a capital of over 1 billion euros and around 500 shareholders worldwide, not only calls into question the professionalism of EY but also raises concerns about the robustness of Luxembourg's financial supervisory system. Moreover, EY's persistent refusal to provide references to the mandatory professional insurance policy raises further questions about the firm's transparency.

The Facts

EY, formally appointed as the legal auditor "Commissaire du comptes" of Ixellion SA on July 29, 2021, allegedly failed to convene the general assembly within the legal deadline of October 25, 2023, despite the request of shareholders representing over 68% of the share capital, made according to the law of August 10, 1915, which regulates commercial companies. This alleged negligence would have allowed the Chairman of the Supervisory Board of Ixellion to continue problematic management, leading to the loss of control of the British subsidiaries PPMT Technologies Ltd and X Technologies Ltd, with substantial losses.

Documentary Evidence

The documents presented, including correspondence with EY, official registration in the Luxembourg business register (RCS), and signed contracts, seem to indicate EY's responsibilities as a legal auditor. EY's subsequent denials appear to be in contrast with this evidence, which could aggravate its legal and ethical position. In particular, the official registration of EY as "commissaire aux comptes" with the RCS, carried out by notary Danielle Kolbach, would seem to confirm its role as legal auditor.

Questions about the Integrity of the RCS

EY's attempt to question the validity of its registration as "commissaire aux comptes" with the Luxembourg Business Register (RCS), despite the absence of challenges for nearly three years and the validation of the transcription by a public official, raises doubts about confidence in the Luxembourg legal system and EY's legal and professional responsibilities.

Consequences for Antonio Sedino and Ixellion SA

The alleged inaction of EY and the failure to circulate crucial documents would have had serious consequences for Antonio Sedino, former CEO of Ixellion SA, and for the company itself. Sedino claims to have suffered significant economic and reputational damage due to EY's behavior.

EY allegedly did not give due weight to an independent valuation report of Ixellion's nickel inventory, which estimated its conservative value at around 800 million euros. This report could have supported Sedino's defense and demonstrated the correctness of the company's balance sheet. The alleged negligence in the circulation of this document by EY would have hindered investigations, causing damage to Sedino, the company, and shareholders.

Responsibility Ping-Pong between CSSF and IRE

The ping-pong of responsibilities between the Commission de Surveillance du Secteur Financier (CSSF) and the Institut des Réviseurs d'Entreprises (IRE), the two supervisory bodies responsible for overseeing auditors in Luxembourg, raises doubts about the effectiveness of Luxembourg's financial supervisory system.

The Issue of the Insurance Policy

EY's persistent refusal to provide references to the mandatory insurance policy, despite repeated requests, raises doubts about EY's transparency. These questions require immediate answers.

ESMA Informed and the Deadline for Amicable Resolution

Months have passed since the CSSF and IRE were urged to intervene, but to date, no intervention has been initiated. Now, the European Securities and Markets Authority (ESMA) has also been informed of this scandal through a detailed report.

According to the law of July 23, 2016, the supervisory bodies have the obligation to intercede with the complainants (in this case, Ixellion and its shareholders) to seek an amicable solution within 90 days of the filing of the complaint. As the complaint was formally filed on April 14, the deadline for reaching an agreement is set for July 14. If this deadline passes without a resolution, the case could end up in court with a claim for damages of over 1 billion euros, involving not only EY but also all parties that remained inactive.

The silence of the regulatory authorities in the face of these accusations and the failure to activate the conciliation procedures provided for by law raise further doubts about the credibility of Luxembourg's financial supervisory system.

Risks to Luxembourg's Integrity and Reputation

The seriousness of the facts, the apparent weaknesses demonstrated by the Luxembourg system, and the risk of billion-euro litigation could seriously jeopardize the country's integrity and its reputation on a global level. If the Luxembourg authorities do not act decisively and transparently to address this scandal, Luxembourg could suffer significant damage to its reputation and credibility as a financial center.


The Ixellion case represents a significant challenge for the Luxembourg financial system. The allegations of negligence against EY, the questions about the validity of the RCS, the refusal to provide references to the insurance policy, the ping-pong of responsibilities between CSSF and IRE, and the risk of billion-euro litigation highlight significant criticalities in the country's financial supervision and governance.

It is imperative that the Luxembourg authorities act with determination to clarify the matter and promptly activate the conciliation procedures provided for by law. An in-depth and impartial investigation into EY's actions may be necessary, with possible sanctions in case of ascertainment of responsibilities. Furthermore, a revision of the supervisory framework appears appropriate to ensure a clear attribution of competencies and effective collaboration between the regulatory authorities.

Only through decisive and transparent action will Luxembourg be able to begin restoring confidence in its financial governance, safeguarding its reputation as a credible financial center, and avoiding the potentially devastating consequences of billion-euro litigation. The stakes are extremely high, and the global financial world is watching with great attention.

The Ixellion case should represent a wake-up call for Luxembourg and the entire international financial system. It underlines the vital importance of rigorous supervision, transparent governance, and impeccable professional ethics. Only through concrete commitment to these principles will Luxembourg be able to effectively address this crisis and preserve its reputation.

The time has come to act with absolute determination to clarify this matter before it is too late. Time is running out, and the consequences of further inertia could be catastrophic.

Anthony Baker News - In an era where news flows fast and often slips through the cracks, it is essential that determined figures emerge to shed light where darkness reigns. For this reason, I have decided to focus specifically on financial scandals. With a critical eye, I have chosen to delve into the intricacies of major financial corporations, those that often consider themselves untouchable.

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