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The embattled boss of KPMG’s United Arab Emirates business has sought to cement his position by sending the firm’s biggest client a statement signed by 30 of its capital partners pledging their solidarity and loyalty to the firm.
The client reports seen by the FT come against the backdrop of a series of leaks inside KPMG’s Lower Gulf, which it claims are serious question In accounting firms, including nepotism, nepotism, and a culture of fear.
The public display of solidarity is a highly unusual move in an industry where client relationships are carefully managed and internal disputes are kept behind closed doors.
All 30 of the firm’s capital partners who own the business have been named signatories to the statement, including chief executive and chairman Nader Hafar.
It said KPMG had been “the subject of many damaging articles” in the media about “our governance, our leadership and the state of our partnerships”.
In it, KPMG’s Ha Bay partners said they “want to reassure our staff, our clients and our community that we will remain united”.
“We are confident in our company’s governance structure that will continue to enable us to provide exceptional service to our clients,” it said. “We reject recent claims that capital partners are trying to suspend KPMG’s local leadership in the Lower Bay region.”
Last week, the Financial Times reported that an anonymous group of 10 capital partners had contacted KPMG International, claiming retaliation for revealing their identities Urge it to suspend local leaders and KPMG down the Gulf’s board and appoint an outsider as interim boss.
KPMG International, which oversees the company’s global business network, has been charged fail Responding to previous whistleblower reports from Operation Low Bay. The company has previously said it takes all reports seriously and takes appropriate action.
KPMG Lower Gulf provides audit, advisory and tax services to 3,400 clients in the UAE and Oman, including real estate and retail group Majid Al Futtaim Group, as well as sovereign wealth funds ADQ and Mubadala Investment Company.
A former Emirati partner said the client memo looked like an attempt to “suppress” dissent from partner groups.
Another former Emirati partner said the memo demonstrated a “culture of fear and coercion”. “The message is clear: sign or leave,” he added.
KPMG Habay said the statement “reaffirms the unanimous support of the capital partners for the corporate governance structure”.
The statement to customers comes after the company endured a turbulent summer that led to quit A partner has raised questions about Haffar’s governance issues, including the appointment of his brother-in-law to a senior role.
Hafar has agreed to re-run for his post after being accused of dragging his partner into the railroad Extend term for five years, though dissidents fear credible opponents have left the company, or fear the consequences if they turn against him. The process is expected to wrap up in October, according to a statement signed by the partners.
One client who received the letter did not believe it reflected how the company actually handled internal governance issues, calling it “nonsense.”
Despite showing solidarity to clients, Hafar was forced to halt a plan last week to appoint outside consultancy International Leadership Alliance to conduct confidential interviews with partners about the culture of KPMG’s UAE operations.
Haffar wrote to partners that he suspended the program after some of them “raised concerns” about LAI’s relationship with some in KPMG’s lower bay.
KPMG board member Richard Rekhy is listed as an executive coach and advisor on LAI’s website and promotional materials, while Haffar’s wife, Racha Abdrabbo Haffar, has previously volunteered for the LAI Women’s Leadership Program. Rekhy did not respond to a request for comment through KPMG, nor did Racha Haffar.
KPMG Habay said it has used LAI for many years and “it is important that we continue to support our staff and our many new entrants”.
“We have paused our cultural review program until the CEO election process is complete to ensure our capital partners are aligned with our approach moving forward,” it added.
At least six partners have left KPMG’s Lower Bay area during the unrest, including two who recently resigned – board member Shabana Begum and tax partner Nilesh Ashar. Begum did not respond to a request for comment. Ashar said he had resigned to pursue another career opportunity and would be leaving on good terms.
Other partners who have left the firm since June include HR head Gretchen Moxcey; consulting head Farhan Syed; transaction partner Ashish Khandelwal; and tax head Stuart Cioccarelli.
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