EY must pay $10.8M to whistleblowing auditor
Ernst & Young must pay $10.8 million to an auditor who blew the whistle on wrongdoing at a Dubai gold refiner in another black eye for the U.K. accounting industry.
Former EY partner Amjad Rihan had told the court that the accounting firm tried to suppress a report that uncovered multiple problems at the refiner, including allegations about the importation of gold from Moroccan suppliers that had been coated with silver to avoid export restrictions.
“Almost seven years of agony for me and my family has come to an end with a total vindication by the court,” Rihan said in a statement Friday after the ruling. “My life was turned upside down as I was cruelly and harshly punished for insisting on doing my job ethically.”
The ruling is another setback for the so-called Big Four, which has been beset by criticism of their work and calls to break up their audit and consulting units. In July, the U.K. accounting regulator said it had issued record fines of 42.9 million pounds ($53.6 million) in the previous 12 months.
In his court filings, Rihan alleged that the gold refiner failed to disclose billions of dollars in cash transactions to authorities and imported supplies from high-risk conflict regions. After facing pressure to alter the findings from EY and Dubai authorities, he fled the country in fear of his family’s safety, he said.
EY will appeal the ruling, saying the judge created “an unprecedented legal duty.” The accounting firm also said that it had acted properly in reporting the actions of the auditor.
“It was the work of an EY Dubai assurance team that uncovered serious irregularities and reported them to the proper authorities,” EY said. “Their work ultimately resulted in sanctions against the refiner and contributed to significant changes in the sourcing of precious metals and the regulation of refiners in Dubai.”