Dubai court can hear case against Deloitte unit after collapse of Hezbollah-linked bank

Members of Lebanon's Hezbollah wave their flags during a rally. The collapsed Lebanese Canadian Bank has been linked to funding for Hezbollah. (Reuters)
Updated 14 February 2018
0

Dubai court can hear case against Deloitte unit after collapse of Hezbollah-linked bank

LONDON: A Dubai court could hear evidence relating to the alleged role of auditor Deloitte & Touche (M.E.) in the collapse of Lebanese Canadian Bank – which went bust after being linked to an international drug smuggling and money laundering racket with ties to Hezbollah.
It follows a ruling in a legal row between a group of investors in the collapsed Lebanese Canadian Bank and the regional Deloitte partnership of the auditor, over whether or not the Dubai International Financial Center (DIFC) Courts had jurisdiction to hear the case.
The shareholder group is led by Nest Investments Holding SAL, which was founded by Gulf entrepreneur, Ghazi Abu Nahl. They claim they lost some $128 million from the collapse of the bank.
A Nest spokesperson said: “The allegations against Deloitte & Touche (M.E.) are serious in nature – involving complicity in money laundering and terrorist financing through the Lebanese Canadian Bank. The defendant plays a prominent role in the Middle East audit market and remains the auditor in liquidation at the bank. It is therefore particularly important that the allegations against DTME be heard and answered in a competent court.”
The case stems from a US government probe into the Beirut-based Lebanese Canadian Bank which alleged that it was at the center of a global drug trafficking and money laundering network that shipped narcotics from South America to Europe and the Middle East through Africa, with the proceeds laundered through Lebanon’s financial system.
The investigation led the US authorities to issue a so-called “FinCen” notice on Lebanese Canadian Bank as a “financial institution of pri­mary money laundering concern.”
Such notices, issued under the US Patriot Act, typically sound the death knell for banks because they effectively prevent them from accessing the global financial system.
A group of 11 shareholders including Nest launched proceedings at the Dubai International Financial Center Courts in 2016, alleging that Deloitte & Touche (M.E.) acted negligently during its audit of the bank and failed to identify grounds for concern under anti-money laundering laws.
The audits were undertaken by Deloitte’s Lebanon partnership between 2006 and 2009.
One of the central claims made by the shareholder group was that the audits of the bank failed to disclose various illicit activities at the lender, that included terror financing and money laundering.
Specifically, it was claimed that Lebanese Canadian Bank had intentionally or negligently aided and abetted terrorist activity by maintaining bank accounts for Hezbollah entities.
Deloitte & Touche (M.E.) had argued that the case should be dismissed for jurisdiction-related and other reasons — including that Lebanese law, not DIFC law, applied.
But a judgment handed down by Justice Roger Giles in the DIFC Courts found that while Lebanese law was indeed applicable, the “matters were open to factual and legal investigation at trial and were not so clear that the claimants had no real prospect of success.”
He added that “further materials were likely to become available to show the relationship between the claimants and the Lebanese auditor.”
Nest hailed the decision as a “landmark” ruling.
“This is the first claim of its kind to be considered by the DIFC Courts – targeting a leading audit brand for negligence and deceit in their audits of a client bank that was allegedly acting as the financial arm for drug traffickers and terrorist financiers,” it said in a statement.
A Deloitte & Touche (M.E.) spokesperson said in a statement to Arab News that  the claim against the firm was “without merit” and that it would vigorously resist any attempt to pursue it.


‘There is no free lunch’, Macron tells tech giant CEOs

Updated 24 May 2018
0

‘There is no free lunch’, Macron tells tech giant CEOs

PARIS: President Emmanuel Macron told executives from the world’s biggest technology firms on Wednesday that he wanted innovation to be a driving force for the French economy, but also that they needed to contribute more to society.
The French leader paints himself as a champion of France’s plugged-in youth and wants to transform France into a “startup nation” that draws higher investments into technology and artificial intelligence. He is also spearheading efforts in Europe to have digital companies pay more tax at source.
Macron’s guest-list included Facebook Inc. Chief Executive Mark Zuckerberg, IBM’s Virginia Rometty, Intel Corp’s Brian Krzanich, Microsoft Corp’s Satya Nadella and a raft of other big hitters in the corporate world.
“There is no free lunch,” he quipped in English to the executives lined up on the steps of the Elysee Palace for a photo call at a lunch meeting. “So I want from you some commitments.”
As Macron spoke, IBM announced it would hire about 1,400 people in France over the next two years in the fields of blockchain and cloud computing.
Ride-hailing app Uber also said it planned to offer all its European drivers an upgraded version of the health insurance it already provides in France in a drive to attract independent workers and fend off criticism over their treatment.
Macron will hold one-on-one talks with Mark Zuckerberg on tax and data privacy on the sidelines of the Tech For Good summit — a day after the Facebook chief executive faced questions from European Union lawmakers.
Those talks will be frank, an Elysee official said ahead of the meeting. While Macron will be pitching France Inc, he will also push his case for a European Union tax on digital turnover and a tougher fight against both data piracy and fake news.
Zuckerberg on Tuesday sailed through a grilling from EU lawmakers about the social network’s data policies, apologizing to leaders of the European Parliament for a massive data leak but dodging numerous questions.
Macron told the executives that business needed to do more in tackling issues such as inequality and climate change.
“It is not possible just to have free riding on one side, when you make a good business,” the French president said.