Qawasmi Sues Ernst & Young over Major Fraud in Jordan
amwalinvest.com - A lawsuit from a Jordanian attorney accusing the accounting firm Ernst & Young in helping the x-BOD to hide financial problems at Amwal Invest. Amwal Invest is asking for 77.5M JD for its shareholders in damages and attorney's fees from EY.
Ernst & Young accused as the firm who facilitated a "major fraud in Jordan" by helping the x-BOD of Amwal Invest deceive the shareholders about its financial conditions. The lawsuit filed by Amwal Invest Attorney Ghandi Qawasmi in a Jordan court against Ernst & Young headquarter and subsidiaries in New York, British, Switzerland, Middle East, South Africa, and Jordan.
Qawasmi said on Tuesday that the lawsuit is one of the first major legal action stemming from Anti-corruption trends in Jordan. Prosecutors cite several violations by EY of Jordan Company Act and violation of more than 8 International Audit Standards. The lawsuit alleges that Ernst & Young conspired with the x-BOD of Amwal Invest in a scheme to shuffle tens of Millions of Dinars from its balance sheets in order to boost the appearance of Amwal Invest’s liquidity, does fall under the Jordanian jurisdiction and the alleged misconduct of EY and covered by the Jordanian legislation.
Amwal Invest is a public company with capital of 45M JD and the number of shareholders is more than 7800. In 2011, a small group of activists and shareholders investigated informally the performance of the Company and discovered that too much corruption cases in the company profile. In the General Assembly Meeting held in May 2011, the financial statement has been disapproved due to the misconduct of the x-BOD and EY. A list of legal violations carried out by the Company's Board of Directors has not been declared by EY. The main corruption case in Amwal Invest story was the so-called Sara Transaction, where the company bought Real Estates valued at 37M JD from its Chairman, Mr. Fayez Faouri, the Chairman, which has been marked as a conflict of interest. After a lot of investigations in Jordan Anti-Corruption Commission (JACC) and consultancy reports, all members of x-BOD have been taken to the court and jailed.