Hong Kong police have raided the offices of Ernst & Young, less than a week after the auditing firm agreed to make a “substantial payment” to the liquidators of the territory’s largest corporate failure, Akai Holdings.

Akai, formerly controlled by Hong Kong entrepreneur James Ting, owed creditors $1.1bn when it went bankrupt nine years ago. Akai’s liquidator, Borelli Walsh, accused E&Y of negligence in its auditing of the former electronic products manufacturer, in a civil action whose first writs were served in 2004.