Dubai-based Abraaj mingled investor funds report finds

Abraaj founder Arif Naqvi pictured at a session at the World Economic Forum. (Reuters)
Updated 11 June 2018
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Dubai-based Abraaj mingled investor funds report finds

  • Deloitte reports highlights corporate governance failings
  • But no evidence of embezzlement

LONDON: Abraaj tapped investor money because of cash shortages at the group, a report from Deloitte found.

Money from Abraaj’s $1 billion health care fund was used to pay management fees and other expenses, Deloitte said in a forensic report which found no evidence of embezzlement.

The accounting firm, which was hired by Abraaj to examine its finances, concluded there was mixing of Abraaj’s own money in a health care fund and its fourth fund, according to a summary of the Deloitte report that was presented to creditors on June 4 and seen by Bloomberg News.

Deloitte said there was a lack of adequate governance at Abraaj and an overall weakness in its control framework, Bloomberg reported.

The firm faced a cash shortage when the sale of Pakistani utility K-Electric was delayed, the accounting company said.

Deloitte has presented its findings to the Dubai Financial Services Authority.

Abraaj last week said it expects its creditors to agree to a standstill on debt payments after a June 4 meeting.

Deloitte was engaged by the private equity outfit after an earlier review by KPMG triggered by concerns raised by investors that included the Bill & Melinda Gates Foundation.


Oman regulator suspends KPMG from new auditing work over ‘irregularities’

Updated 14 November 2018
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Oman regulator suspends KPMG from new auditing work over ‘irregularities’

  • In Oman, KPMG is banned for one year from doing new auditing work for companies regulated by the CMA
  • It is another setback for KPMG, which is under scrutiny after losing clients in South Africa following its role in a high-profile corruption scandal there

DUBAI: Oman’s securities regulator said on Wednesday it has suspended audit firm KPMG from doing new work for a year after finding major financial and accounting irregularities at some listed companies.
The Capital Market Authority (CMA) took corrective steps at those companies to protect investors, it said in a statement without naming the firms or giving other details.
A review by the CMA “established professional negligence on the part of some audit firms that warranted disciplinary measures against them in the interests of the investors and other stakeholders,” the CMA said.
It is another setback for KPMG, which is under scrutiny after losing clients in South Africa following its role in a high-profile corruption scandal there and has faced investigations in Britain over its auditing of some clients.
In Oman, KPMG is banned for one year from doing new auditing work for companies regulated by the CMA, including listed companies, securities firms and insurers.
The penalty does not affect projects where KPMG has already been appointed, and KPMG has a right to appeal against the penalty before an independent authority, the CMA said.
KPMG said it could not immediately comment on the CMA’s statement.