The Norwegian branch of KPMG International was ordered to pay $100 million in damages Friday, after Oslo's district court found that the accounting group was negligent in auditing the books of Finance Credit. KPMG International has said that it will appeal.
Finance Credit's 2003 bankruptcy was one of the worst in the country's history, and it owed about $200 million to eight different banks when it went out of business. The company's founder was sentenced to nine years in prison and ordered to pay $185 million earlier this year, after he was found guilty of fraud, hiding assets and other accounting violations.
In its ruling, the Oslo court said that, by the close of 2000, Finance Credit was insolvent, which KPMG's Norwegian branch should have realized. Ironically, Finance Credit offered collection agency services.
Meanwhile, a month after KPMG LLP acknowledged "full responsibility for the unlawful conduct by former KPMG partners," in a tax shelter case brought by the U.S. Department of Justice, the company is looking to start shoring up a defense.According to the Washington Post, lawyers for KPMG LLP recently filed court papers in Texas, seeking the ability to talk to plaintiffs who have filed civil lawsuits against the company. Investigators have said that tax shelters sold by KPMG may have helped clients avoid paying about $1.4 billion in taxes between 1996 and 2002. KPMG also wants to talk to the plaintiffs' personal tax advisors about what they knew about the shelters and why they failed to disclose them on their individual income tax returns.
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