KPMG partners in Dubai raised concerns about the cost and transparency of a $1.5mn review by lawyers at Freshfields that followed allegations of misconduct at the Big Four firm.
The review was announced in July 2022 after the FT reported allegations of nepotism by KPMG’s then-boss in the United Arab Emirates, Nader Haffar, whose tenure had been extended by five years after a snap vote with no opponents. Freshfields also advised on a fresh leadership election as part of the mandate.
Board members complained they were being kept in the dark about the “magic circle” law firm’s investigation, according to new information disclosed to the Financial Times. One person with knowledge of the matter said board members did not receive a copy of any Freshfields report.
They were also told that the law firm had been “swayed” on matters where its view had differed to that of KPMG’s local governance review committee, which commissioned Freshfields and ran the process, according to the information disclosed.
The board members also questioned why Freshfields was being paid so much and why KPMG had bypassed the normal procedure for procurement worth more than $500,000, which insiders said required executive committee approval after obtaining at least three quotes.
KPMG’s UAE and Oman business, called KPMG Lower Gulf, never published Freshfields’ recommendations.
KPMG International and KPMG Lower Gulf declined to say whether Freshfields produced a written report or to comment on any of the governance issues raised in this article.
