Consulting giant EY was complicit in systematic fraud in which one of the world’s biggest coal companies, Peabody Energy, exaggerated the quality of Australian coal it sold to customers, a whistleblower has claimed.

The whistleblower, a former employee of Peabody Coaltrade Australia, alleges Peabody, along with two testing laboratories, falsified records by manually “upgrading” the certified quality of coal after it was tested but before it was shipped.

The claims were made in a partially redacted submission uploaded to a parliamentary committee’s website last year and then removed.

EY and Peabody have both strongly denied the allegation contained in the confidential submission to federal parliament’s inquiry into ethics in the accounting industry in the wake of the PwC tax scandal.

Peabody said similar accusations were extensively investigated and not substantiated while EY Oceania assurance leader Glenn Carmody said the firm “comprehensively rejects” the allegations, and stood by the quality of its Peabody audit.

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