Dubai court orders KPMG to pay $231mn for Abraaj fund audit failure

Dubai court orders KPMG to pay $231mn for Abraaj fund audit failure

A court in Dubai has ordered KPMG Lower Gulf to pay more than $231mn to a group of investors who claim they lost money because of poor-quality audit work by the firm on a fund they were invested in.

The judgment, issued late last month, found that the Big Four firm breached international auditing standards by approving the financial statements of an infrastructure fund managed by collapsed private equity firm Abraaj Group.

The award is one of the largest ever against an accounting firm and exceeds KPMG Lower Gulf’s revenues of $210mn in its most recent financial year.

An official translation of the court ruling said: “The court has 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 said in a statement that it believed it had strong grounds to appeal and had taken the case to the court of cassation, or supreme court.

KPMG has not disclosed whether the award would be covered by insurance or if its international network would step in to help with the costs.

KPMG Lower Gulf’s operations were already in the