Saudi: Deloitte receives two-year accountancy ban
Deloitte has been banned from providing accountancy services in Saudi Arabia for two years, owing to historic work with contractor, Mohammad Al-Mojil Group
Saudi Arabia’s Capital Market Authority (CMA) has banned the local arm of US-headquartered Deloitte & Touche from providing accountancy services in the kingdom for a period of two years.
The ban, which Deloitte received for breaching the rules of accumulated losses, relates to the accountancy firm’s historic work with Saudi Arabian contractor, Mohammad Al-Mojil Group (MMG).
Previously, the CMA suspended Deloitte from conducting auditing work for listed companies in Saudi Arabia for a period of two years, beginning 1 June, 2015, according to news agency, Reuters.
The latest decision to impose a two-year ban on Deloitte’s accountancy operations in the kingdom was taken by the CMA’s Committee for the Resolution of Securities Disputes (CRSD), and represents the most severe penalty so far imposed on the company in relation to its work with MMG.
Last week, the CRSD sentenced three MMG executives – including founder Mohammad Al-Mojil and his son Adel Al-Mojil – to prison terms for misrepresenting the company’s value. The committee also ordered the contractor to pay $427m (SAR1.6bn) for “illegal profits”, and imposed an additional fine of $720,000 (SAR2.7m), according to the Reuters report.
A statement issued on behalf of the Al-Mojil family in response to the CRSD judgment said: “Messrs Al-Mojil are deeply disappointed and shocked by this unprecedented ruling, which is fundamentally flawed.
“Messrs Al-Mojil believe that the charges and the investigation process were defective form the start,” the statement added.
The CMA and CRSD have not yet confirmed the commencement date for Deloitte’s latest operations ban in Saudi Arabia.
UPDATE (15:00, 20/06/2016):
A statement issued to Construction Week by a spokesperson from Deloitte & Touche Bakr Abulkhair & Co noted: “The CRSD decision does not extend to audit services provided to other companies and entities not regulated by the CMA operating and doing business in Saudi Arabia. Nor does it extend to non-audit services, which include – but are not restricted to – consulting, tax, risk management, financial advisory, and all other advisory services provided to clients in Saudi Arabia, including listed companies and entities authorised by the CMA.”