Tue, 2013-09-03

Qawasmi Sues Ernst & Young over Major Fraud in Jordan ‎ - 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.‎‎