A Dubai court has ruled in favor of a group of investors and has ordered KPMG Lower Gulf to pay more than $231 million in compensation for their losses.
In a report by Financial Times, the investors noted that they lost their money due to a poor quality audit of Abraaj by KPMG.
The ruling found that the firm breached international auditing standards by approving the financial statements of an infrastructure fund managed by private equity firm Abraaj Group.
As one of the largest ever compensation against an accounting firm, it exceeds KPMG’s revenues of $210 million in the most recent financial year.
The court ruling stated, “The court had 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.”
KPMG Lower Gulf has now taken the case to the court of cassation, or supreme court.
Founded in 2002, the Abraaj Group, which claimed to manage about $14 billion of assets, was one of the Middle East’s biggest private equity firms, with interests across Africa, Asia, Latin America, and the Middle East. It was liquidated in 2018 when investors commissioned an audit investigating alleged mismanagement in its $1 billion healthcare fund.
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