Whistle-blower takes EY to trial in money laundering cover-up case

Amjad Rihan, who is represented by Leigh Day, claims that he was forced out of EY after he identified major violations committed by EY’s audit client, Kaloti Jewellery International. The findings included billions of dollars’ worth of cash transactions; importing large quantities of gold from Moroccan suppliers which had been painted with silver to avoid gold export restrictions; and transactions with high-risk countries such as Sudan and Iran without proper due diligence. In its written defence EY accepts that the silver-coated gold provided reasonable grounds for knowing or suspecting that Kaloti was engaged in money laundering.  

Mr Rihan’s claim has informed a major investigation by British and French journalists into the links between Dubai and criminal drug trafficking and money laundering networks in Europe and the UK. The results of this investigation are due to be broadcast in a BBC Panorama programme on Monday 28 October 2019 at 8.30pm and on French channel France 2 on Tuesday 29 October at 11pm. 

In his legal case Mr Rihan alleges that he was compelled to flee Dubai because he was fearful that voicing his concerns about the audit findings had placed him at risk from the Dubai authorities.  The Dubai government is anxious to promote their lucrative gold industry on the world stage and preserve Dubai’s reputation as an international gold trading hub. Mr Rihan claims that the Dubai authorities intervened in the audit in an effort to improve the result for Kaloti, an approach with which EY allegedly acquiesced. 

After escalating his concerns to EY’s global executives in London, it is claimed that the company colluded with Kaloti and the Dubai authorities to ensure that the serious audit findings were suppressed in the audit reports and not reported to relevant authorities.

EY denies Mr Rihan’s allegations. It claims that the audit was conducted in a lawful and ethical manner consistent with the standards laid down by the Dubai regulator. 

Mr Rihan said: 

“I believe there is clear evidence that EY, amongst its many failings during the course of this audit, covered up the fact that Kaloti was importing large quantities of silver-coated gold. EY now admits this provided reasonable grounds for knowing or suspecting that Kaloti was engaged in money laundering. The investigations by British and French journalists have now shown that those transactions have facilitated the laundering of proceeds of drug trafficking in the UK and several European countries.  This demonstrates the devastating impact on society caused by major international accountancy firms sacrificing their independence and integrity to appease their clients’ interests.”

Paul Dowling, solicitor in the international team at Leigh Day, added:

“Our client was treated appallingly by EY for trying to do the right thing and ensure that the very serious issues identified at Kaloti were properly reported. Rather than thanking Mr Rihan for bringing the violations to their attention, our client’s case is that EY suppressed the findings and left him and his family at risk, forcing him to leave his home in Dubai and resign from his job. We look forward to presenting his case to the court next year.”