RIYADH: Dubai private-equity firm Abraaj Group is suing KPMG for at least $600 million over its role in the insolvency of the firm in what is the latest in a string of complaints of sloppy auditing made against the Big Four firm, Bloomberg reported.
The claimants — two units of Abraaj which are now in liquidation — allege that KPMG accountants breached their duty of care when auditing the private-equity firm, according to court documents filed in Dubai on Nov. 3.
If KPMG and its local Lower Gulf subsidiary had complied with their duties, then “irregularities” relating to the firm’s financial statements would’ve been identified sooner, the claimants said.
KPMG Lower Gulf disputes the claims and will defend the Dubai court’s judgment, a spokesperson said. The firm undertook “comprehensive actions” to “strengthen our culture, governance and compliance processes,” he said.
Abraaj, which managed some $14 billion at its peak, collapsed into insolvency in 2018 after being accused of misusing investor funds.
During the period KPMG audited the Abraaj funds, the firm is alleged by US prosecutors and regulators to have committed multiple acts of racketeering and securities-fraud, leading to the world’s largest-ever private-equity insolvency, according to Bloomberg.
KPMG was Abraaj’s auditor for six years.
