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Successful Whistleblower Slings Some More Mud at EY

Amjad Rihan

“I didn’t feel I had a choice. I had to fight for justice. And any cursory examination of the facts of the case showed that I was clearly in the right. Given that, I have never been able to understand why EY fought a losing battle for so long.”

Amjad Rihan, a former audit partner at EY in Dubai, said regarding EY giving up its legal fight on having to pay him $10.8 million in compensation for blowing the whistle on a client that was suspected of laundering money and buying gold from conflict zones.

The U.K. High Court ruled in favor of Rihan last April, after he told the court that EY tried to suppress a report that uncovered multiple problems at Dubai-based gold refiner Kaloti Jewellery International, including allegations about the importation of gold from Moroccan suppliers that had been coated with silver to avoid export restrictions, Bloomberg reported at the time.

Rihan, who was the partner in charge of the 2013 audit of Kaloti, said he wanted to report the suspicious activity at the time, but his bosses watered down reports and told him not to be a narc.

The BBC reported in October 2019:

“If you identify a suspicious transaction you should report it to the authorities and what we identified was way beyond suspicion. Instead of reporting the crimes that I told them about, my bosses just covered them up,” Rihan said.

EY did not just fail to report the crime – it helped to cover it up too.

In the initial report, Kaloti seems to admit buying gold coated with silver. It says: “We acknowledge an incident… with the bars coated with silver.”

But EY rewrote the report so that it said: “We acknowledge transactions… in which there were certain documentary irregularities.”

Shortly after blowing the whistle on EY, Rihan was fired by the firm. In a lawsuit filed in January 2018, he accused EY of “unlawful, unprofessional, and unethical” conduct in its audit of Kaloti.

According to a report in today’s Financial Times, EY said in a statement that it remained “disappointed by the trial judge’s decision and by the subsequent refusal of leave to appeal the underlying findings of fact, with which we firmly disagree.

“With such an impediment, we concluded that our appeal on the law, even if successful, no longer merited the time and resources involved. We therefore withdrew the appeal last year.”

EY drops appeal against $11m Dubai whistleblower case [Financial Times]
EY: Gold, drug money and a major auditor’s ‘cover-up’ [BBC]

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