Staff accuse KPMG of ignoring complaints about UAE boss

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KPMG’s global management has been accused by staff of failing to act on written complaints about the managing director’s conduct of the accounting firm’s business in the United Arab Emirates.

Current and former KPMG employees told the Financial Times they had contacted the company’s world leaders by email and on its whistleblower hotline at various times over the past three years, but no clear action was taken. had not been taken. “I don’t think they care,” said a former staffer.

These people described a culture of fear at KPMG Lower Gulf, which operates in the United Arab Emirates and Oman, with colleagues facing a backlash if they disagreed with its chief Nader Haffar’s approach.

“The only way to keep your job is to keep your mouth shut,” said a former associate, adding that people who disagreed with Haffar were “immediately sidelined or fired.” Another former partner said Haffar had “the hottest temper you’ve ever seen”.

Three other former employees said they were afraid to raise similar concerns with global organization KPMG International for fear of retaliation from the Lower Gulf practice’s management team.

“Many of us wonder how we can credibly advise our clients and reassure shareholders, when our own leaders are failing to live up to our most fundamental values ​​which we broadcast as sacrosanct,” said one employee, who sent an anonymous whistleblower complaint – seen by the FT – on Tuesday to KPMG’s global chairman and chief executive, Bill Thomas.

KPMG Lower Gulf clients include Dubai World, an investment manager for the emirate’s government, and sovereign wealth funds ADQ and Mubadala Investment Company. He also advises Abu Dhabi National Oil Company and Majid Al Futtaim Group, an Emirati real estate and business conglomerate.

KPMG Lower Gulf was thrown into chaos last week after a group of partners discussed holding a secret ballot to determine whether Haffar had lost support but then scrapped the plan, according to people familiar with the situation. The plot followed the departures of senior partners who were forced out after raising governance concerns, the people said.

The partners had been concerned about the position of Talal Cheikh Elard, Haffar’s brother-in-law, who was hired as a partner in October and appointed to the executive committee. Tensions have erupted in recent weeks after senior partners questioned an attempt by Haffar to give Elard a more powerful role, people with knowledge of the situation said.

Elard’s appointment came as a surprise to some within the company as he spent most of his career at an advertising agency. Some at the company were initially unaware of Haffar and Elard’s personal relationship, which an insider said “landed like a bomb afterward.”

People at KPMG also raised concerns about the conduct of Haffar and Elard, which included beating desks and yelling at staff. Staff were reduced to tears by the behavior of senior managers, a current employee said. “I don’t think anyone should have to work under these conditions,” the employee said.

They added that conduct at KPMG Lower Gulf was “the kind of thing that just wouldn’t be tolerated anywhere else in the global network, so I’m surprised it’s tolerated here.”

“Our firm is synonymous with transparency and integrity. I think we need a full explanation of how this situation evolved. And if it’s not clear, Nader and Talal must leave to restore confidence.

Haffar and Elard remained in their roles and did not respond to requests for comment made via KPMG.

KPMG Lower Gulf said the three partners who left the firm in recent weeks had resigned and it had succession plans in place.

Like the other Big Four accounting firms – Deloitte, EY and PwC – KPMG is a network of national and regional firms that are separately owned but share a brand and adhere to common global standards.

KPMG International said: “We take all reports received by the international hotline seriously, and for each of them, we respond and take appropriate action.”

He declined to comment on governance and conduct issues at KPMG Lower Gulf, but said he takes the allegations seriously. “We encourage all colleagues to speak up if they see or hear something they consider inappropriate and to take appropriate action,” he said.

In an internal email this week, seen by the FT, KPMG’s Lower Gulf staff were told not to respond to press inquiries and that they would be briefed on recent changes within the firm “in the next days”.

A second internal email sent directly from Haffar to staff said the company is “built on the values ​​of integrity, excellence, courage, together, for the best.”

“I want to reiterate that all KPMG colleagues are encouraged to speak up if they hear or see anything they feel is inappropriate, regardless of the topic,” he said in the email. , also consulted by the FT.

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