Bain Capital Partners, a global private equity company, along with 10 its subsidiaries has filed a complaint with a US court against EY for alleged fraud and unfair and deceptive trade practices.
In May 2010, Bain Capital Partners claims to have invested $60m in Lilliput Kidswear, an Indian children's clothing company, on the advice of EY and based on false financial statements audited and certified by EY, according to Reuters who gained access to a copy of the lawsuit.
In September 2011, while Bain Capital Partners had initiated the process to take Lilliput Kidswear to an initial public offering (IPO), the private equity company was alerted by a whistleblower that the revenue of the Indian business might have been inflated and the IPO was halted for the allegation to be investigated.
Bain Capital Partners and 10 other subsidiaries now claim that the investment is "rendered worthless" according to the lawsuit document seen by Reuters. And they are bringing the action against EY for "fraud, aiding and abetting fraud, negligent misrepresentation, and unfair and deceptive trade practices based on EY's involvement in the scheme to defraud Bain.", Reuters reported.
An EY spokesperson said: ""These allegations of wrongdoing are baseless and EY will vigorously defend this matter."
Contacted by IAB, Bain Capital Partners didn't want to comment on the matter.
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