A Dubai court has ruled in favour of a group of investors and ordered KPMG Lower Gulf to pay more than $231 million compensation – one of the largest ever against an accounting firm – for losses made by them, reported Financial Times (FT).
The investors had approached the court saying they lost their money because of poor-quality audit of Abraaj by KPMG.
KPMG ‘committed many violations,’ says Dubai court
Earlier, in November last year, the Dubai Financial Services Authority (DFSA) had imposed fines of $1.5 million (AED5.5 million) on KPMG and $500,000 (AED1.8 million) on Milind Navalkar, a former KPMG Audit Partner.
FT reported that the judgment was issued late last month and found that KPMG Lower Gulf breached international auditing standards by approving the financial statements of an infrastructure fund managed by Abraaj Group.
The court ruling said: “The court has concluded from the papers, documents and the report of the appointed expert committee that it is confident that the auditing company had committed many violations when it audited the financial statements of the investment fund.”
The court ruling added that investors alleged they lost significant sums of money on investments the fund made in Saudi healthcare company Tadawi and Air Arabia.
In a statement to FT, KPMG Lower Gulf said it believed it had strong grounds to appeal and had taken the case to the supreme court.
Abraaj, one of the biggest funds that worked in developing markets and had investors like Bill Gates – went bankrupt in 2018.
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