According to the Financial Times (FT), a Dubai court has ruled in favor of a group of investors and ordered KPMG Lower Gulf to pay over $231M in compensation, which is one of the largest ever against an accounting firm, for losses incurred by the investors.
The investors claimed that they lost their money due to KPMG’s poor-quality audit of Abraaj. The court found that KPMG Lower Gulf violated international auditing standards by approving the financial statements of an infrastructure fund managed by Abraaj Group, and had committed many violations.
Previously, the Dubai Financial Services Authority (DFSA) had fined KPMG $1.5M (AED 5.5M) and Milind Navalkar, a former KPMG Audit Partner, $500,000 (AED 1.8M) in November of last year.
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.”
As per the court ruling, the investors claimed to have lost considerable amounts of money on investments made by the fund in Tadawi, a Saudi healthcare company, and Air Arabia.
KPMG Lower Gulf responded to the ruling by stating that it intended to appeal and believed that it had strong grounds to do so. Abraaj, which had high-profile investors like Bill Gates, was one of the largest funds operating in developing markets and filed for bankruptcy in 2018.
