[ad_1]
Dubai’s financial regulator has temporarily fined KPMG and one of its former partners $2 million for an audit of emerging-market private equity group Abraaj, which collapsed in 2018.
The Dubai Financial Services Authority has announced it has fined KPMG $1.5 million and former head of audit Milind Navalkar $500,000 for failing to comply with international standards in the years to October 2017 for Abraaj’s Dubai-based holding company conducts audit.
Regulator says audit of ‘expected standards’ will find Abraham Not complying with accounting rules, failing to maintain adequate capital resources and concealing the true state of its finances from KPMG.
The DFSA said Navalkar, who signed off on Abraaj’s audit report, “knowingly committed” to KPMG’s work and “failed to act with professional competence”.
KPMG and Navalkar disputed the findings, which will now be reviewed by a tribunal overseeing regulatory enforcement at the DIFC, the region’s main financial hub.
The DFSA ruled in June last year, but KPMG and Navalkar tried to block its release. The court rejected the attempt.
KPMG also faces separate claims of $600 million from the liquidators of two Abraaj entities that are seeking to raise money for creditors, including former employees who remain unpaid. A judicial committee in the emirate is currently deciding whether the claim should be heard in the DIFC Court or the onshore Dubai Court, lawyers said.
DFSA’s latest decision is another blow to KPMG’s UAE business, which has been hit by Internal resistance to governance Under the leadership of CEO Nader Hafar.
KPMG’s audit work at Abraaj was linked to the time of Haffar’s predecessor, Vijay Malhotra, who retired in 2019 after three years at the company. He declined to comment.
Abraaj was one of the largest emerging market investors with $14 billion under management, and its 2018 collapse was sparked by investor concerns about misuse of funds in its $1 billion health care fund.
DFSA last year Abraaj’s former CFO finedAshish Dave, an investor who defrauded Abraaj of funds.
Dave, who worked for KPMG during two stints at private equity firms, is one of the executives facing criminal charges in the US for fraud and conspiracy, With founder Arif Naqvi. Naqvi denies any wrongdoing. Dave could not be reached for comment.
In 2019, the regulator fined two Abraaj entities around $315 million for defrauding investors and misusing funds, the largest fines since the DIFC was created in 2004. The DFSA also fined Naqvi and other former executives $135.6 million. Naqvi is challenging the fine in court.
[ad_2]
Source link