A Dubai court has ordered KPMG Lower Gulf to pay over $231 million to a group of investors who claimed they lost money as the audit work done by the firm on a fund they were invested in was of poor quality.
The judgment, issued in March, found that the firm violated international auditing standards by approving the financial statements of an infrastructure find managed by collapsed private equity firm Abraaj Group.
According to Financial Times, the award is one of the largest ever against an accounting firm and is much higher than the revenue of $210 million posted by KPMG Lower Gulf in the most recent fiscal year.
“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,” reads an official translation of the ruling.
However, in a statement, KPMG Lower Gulf said that it believed it had solid grounds to appeal and had taken the case to the Court of Cassation.
For now, the firm has not disclosed whether the award would be covered by insurance or if its international network would step in to help with the costs.
It is pertinent to mention here that last year in October, the allegations of nepotism and cronyism led to the resignation of KPMG Lower Gulf’s former head. KPMG and a former partner were also fined $2 million in 2022 by Dubai’s financial regulator for their role in auditing funds run by Abraaj.
