Ixellion S.A. Shareholders Move Towards Judicial Mediation Request for Over 800 Million Euros in Damages


  • Author Anthony Baker
  • Published June 15, 2024
  • Word count 1,319

Concerns Over Conflicts of Interest in Luxembourg's Supervisory Bodies

Luxembourg, June 14, 2024 - The saga of Ixellion S.A., involving Ernst & Young (EY), continues to unfold, now reaching a new phase that could lead to a formal request for judicial mediation at the Centre de Médiation Civile et Commerciale (CMCC). This step precedes, in case of failure, a civil action for damages at the Luxembourg Tribunal. However, equally significant is the inaction of Luxembourg's supervisory authorities, particularly the Commission de Surveillance du Secteur Financier (CSSF) and the Institut des Réviseurs d'Entreprises (IRE), raising serious concerns about their ability to manage this situation amicably and as required by law, especially under the shadow of alleged conflicts of interest within their committees and boards.

Request for Judicial Mediation

A group of Ixellion S.A. shareholders (representing over 80% of the capital), represented by Dr. Antonio Sedino, is preparing to initiate a mediation request to address EY's failings in its role as legal auditor. The mediation aims to resolve the conflict swiftly and less expensively than traditional legal routes. This step follows the formal notice of default to EY, notified months ago, without any significant response. The compensation claim exceeds 800 million euros, reflecting the extent of the damage suffered by Ixellion S.A. and its shareholders.

Criticism of Supervisory and Control Bodies

The sluggishness and inertia of the CSSF and the IRE in handling complaints filed against EY have left Ixellion S.A.'s shareholders perplexed. Despite repeated requests for intervention, both institutions seem to have remained inert, almost frozen. This behavior raises legitimate concerns about potential conflicts of interest, given the prominent roles members of the "Big Four," including EY, hold within these organizations' councils.

CSSF: The CSSF, responsible for prudential supervision and the stability of Luxembourg's financial sector, includes committee members with strong ties to major auditing firms, creating an apparent conflict of interest that undermines trust in their decisions. The Resolution Council and the Council for the Protection of Depositors and Investors include prominent figures from the CSSF itself, the Banque Centrale du Luxembourg, and the Ministry of Finance, all appointed to ensure strict and impartial oversight, but the presence of auditors from the "Big Four" in their ranks raises doubts.

IRE: The IRE, the institute responsible for regulating the auditing profession, has shown similar inaction. Despite formal and documented requests, including numerous communications and requests for information, such as EY's professional liability insurance policy, the IRE has avoided taking decisive measures or intervening.

CSSF Audit Technical Committee

The Audit Technical Committee at the CSSF in Luxembourg plays a crucial role in ensuring the quality and integrity of auditing practices in the financial sector. However, a significant issue is the potential conflict of interest, as the committee includes members from major auditing firms, including Ernst & Young (EY). This raises doubts about the committee's ability to impartially assess any sanctions against EY, given that an EY partner is part of the committee itself. This situation could compromise the independence and objectivity of the committee's decisions, negatively affecting trust in the financial supervision system.

CSSF Audit Technical Committee Members

External Members:

  1. Bettina Blinn - BDO Luxembourg

  2. Johan Blaise - PricewaterhouseCoopers (PwC)

  3. Christelle Bousser - KPMG Luxembourg

  4. Olivier Lefevre - Deloitte Audit

  5. Sylvie Testa - Ernst & Young (EY)

Internal Members:

  1. Frédéric Tabak - Committee President

  2. Mathieu Antoine - Committee Secretary

  3. Pedro Da Costa

  4. Agathe Pignon

  5. Anne Wirard

This composition shows the presence of representatives from major international auditing firms, which can be a resource in terms of expertise, but also a potential source of conflicts of interest.

IRE Council

Another glaring example of this issue is the IRE Council, where external members like Sylvie Testa from Ernst & Young, along with partners from other "Big Four" firms such as PwC, Deloitte, and KPMG, sit alongside internal IRE members. This committee plays a crucial role in supervising and regulating the auditing profession, raising the question: how can an auditor like EY not find itself in a blatant conflict of interest when its own partners are involved in the regulation? Although appointments are made “democratically” drawing from all IRE members, this situation seriously calls into question the actual objectivity of a Council that should be tasked with sanctioning and intervening even under the authority of a specific law, namely the law of July 23, 2016.

IRE Council Members

Here are the members of the Institut des Réviseurs d'Entreprises (IRE) Council and the auditing firms they belong to:

  • Christiane Chadoeuf, President - Partner and Audit & Assurance Leader at Deloitte Luxembourg.

  • Daniel Croisé, Secretary - Partner at KPMG Luxembourg.

  • Philippe Sergiel, Treasurer - Partner specializing in financial services at PwC Luxembourg.

  • Emmanuel Dollé, Member - Partner at KPMG Luxembourg.

  • René Ensch, Member - Partner and Country Risk Management Leader at EY Luxembourg.

  • Christian Van Dartel, Member - Partner at Deloitte Luxembourg.

  • Hugues Wangen, Member - Associate at Mazars Luxembourg.

The composition of the IRE council is a clear example of how members of the "Big Four" are deeply intertwined with regulatory institutions. The presence of partners from EY, Deloitte, PwC, and KPMG within the committees and council of an institution that should regulate their own activities raises serious questions about the independence and impartiality of these institutions.

Conflicts of Interest in Supervisory Committees

In a globally significant financial center like Luxembourg, it is essential that supervisory institutions operate without any conflict of interest. However, the current reality presents a worrying picture. The IRE Council, for example, is composed of individuals representing the very auditing firms they are supposed to regulate. How can effective supervision be exercised when the regulators and the regulated are essentially the same entities?

Inadequate Institutional Transparency

A particularly troubling aspect is how the IRE fails to clearly indicate that its committee is composed of individuals closely connected to the Big Four. This fact is not adequately highlighted on the IRE's institutional website, leaving professionals and the public unaware of the actual composition of the audit committee. This lack of transparency is unacceptable for an institution that should ensure integrity and trust in the auditing sector.

Duplicitous Functions of Control

Even more concerning is the presence of Big Four members in both the CSSF and the IRE. This creates a situation of double conflict of interest, where the same individuals can influence the decisions of two main regulatory entities. This overlap of roles undermines the credibility of Luxembourg's entire financial supervision system and raises fundamental questions about these institutions' ability to operate impartially.

The Big Questions That Remain

Here are the big questions everyone should be asking: how many sanctions or fines have been imposed in recent years on the auditing firms whose partners are on the committees in CSSF and IRE? How many of these sanctions were instead directed at firms outside this elite club? Our commitment will be to initiate a thorough investigation to bring these data to light. The suspense is high, and the public deserves to know.

Consequences for Ixellion S.A.

EY's failures have led to serious consequences for Ixellion S.A., including capital erosion and loss of financial assets, causing significant damage to shareholders. The failure to convene the requested general meeting has prevented the discussion and approval of crucial decisions for the company's management, compromising shareholders' ability to exercise their rights.

Next Steps

Mediation at the CMCC represents an attempt to resolve the conflict fairly and swiftly. However, if mediation does not yield immediate results, Ixellion S.A. is ready to consider further legal action, supported by their appointed legal team.


The Ixellion S.A. case highlights the need for a review of governance and supervision practices in Luxembourg to ensure that regulatory institutions are truly independent and free from conflicts of interest. Ixellion S.A.'s shareholders and the public deserve financial supervision that operates in the best interest of all market participants, without favoritism or prejudice.

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.

Now follow me on X at: https://x.com/a_baker_III

Or contact me by email: anthony.baker@tuta.com

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