The plight of expat workers at KPMG Saudi Arabia

Four months ago Abdullah al-Fozan, the head of KPMG’s business in Saudi Arabia, broke some troubling news to his staff. In an email sent to employees on the afternoon of June 13, he wrote that a popular director who had worked at the firm for more than 20 years, Danie de Waal, had unexpectedly died.

Fozan described De Waal, who led the firm’s learning and development initiatives within its advisory team, with warmth and affection. The straight-talking South African had “a great sense of humour, loved cats and plants and always enjoyed a good meal”, Fozan wrote, adding that he “constantly enriched the lives of those around him”. 

Later that week KPMG Saudi Arabia, part of KPMG International’s global network of professional member firms, posted heartfelt condolence messages for De Waal’s family and friends on its public Twitter and LinkedIn accounts on behalf of the “KPMG family”. The posts triggered an outpouring of shock and grief from De Waal’s colleagues and clients, with many sharing poignant anecdotes about the 59-year-old’s “big heart, happy character, and inspiring stories”.

But as news of De Waal’s death spread through KPMG and its network of alumni, so too did a sense of anger and unease among some of his former colleagues. His death came just days after he had been unexpectedly fired and told to leave Saudi Arabia by the end of that month.

De Waal had lived in Riyadh for nearly five years while working for KPMG and expected to work there until his retirement, according to a family member and former colleagues. Two people close to De Waal say the official cause of his death was suffocation, leading them to believe he may have died by suicide.

But there was another reason for the brewing sense of anger. KPMG’s treatment of De Waal is typical of how the firm operates in Saudi Arabia, according to interviews with 12 current and former employees at the Big Four accountancy firm. Those interviewed say unethical employment practices at KPMG Saudi Arabia are commonplace and have left expatriate staff fearing for their personal safety and struggling with their mental health.

These employment practices appear at odds with the values KPMG claims are adopted throughout its international network. They stand in stark contrast to the governance advice the firm sells to prestigious clients, who include governments, companies, charities and universities.

The experience and concerns of the expats working for KPMG Saudi Arabia come as Crown Prince Mohammed bin Salman and his government are seeking to project the kingdom as an increasingly modern society that could become a leading hub for multinational companies in the region.

The government’s ambitious reform agenda, which includes massive investments in tourism, sports and a futuristic megacity named “Neom,” have gone hand-in-hand with efforts to persuade multinationals to relocate Middle East headquarters to the kingdom. Last year Saudi Arabia said it would stop awarding contracts to foreign companies that do not have their regional headquarters based in the kingdom within three years.

An important step to persuading foreign companies to shift operations to Riyadh is convincing their worker base that the kingdom can offer the infrastructure and lifestyle benefits offered by rival business hubs, namely Dubai. But the experience of the KPMG expats in Saudi Arabia shows that concerns about worker rights and the rule of law are still an issue in the autocratic kingdom.

The Financial Times has reviewed the circumstances surrounding the departures of seven western expatriates from KPMG Saudi Arabia since 2018. The business is an important hub for the global accountancy firm with 1,800 staff, annual revenues of $200mn, and high-profile clients including the Public Investment Fund, Saudi Arabia’s sovereign wealth fund; the Saudi ministries of defence and finance; and Saudi Aramco, one of the world’s most valuable companies.

These accounts are supported by documents, including employment contracts, termination notices, copies of internal emails sent to certain staff and whistleblowing reports sent to KPMG International.

Some of those interviewed say they are speaking up reluctantly as they are fond of KPMG and have significant respect for the firm’s operations elsewhere. But they feel the issues in the Saudi Arabia business have been repeatedly ignored by KPMG International and want to protect others from similarly harrowing experiences.

Life in the kingdom

For many western expatriates the prospect of working in exciting and well-paid positions in KPMG Saudi Arabia was a thrilling one. Riyadh has been driving a highly ambitious plan to modernise the conservative kingdom under the leadership of Prince Mohammed — and the offer of tax-free earnings from a reputable employer was a seductive one.

The expat lifestyle in the kingdom often involved living in a tight-knit community in one of several extravagant compounds for foreigners — offering luxuries including swimming pools, cinemas, hammams, golf, art galleries and shopping plazas. One former employee likened his compound to a “slice of the western world in the heart of Riyadh . . . it was like a model village in a Disney movie”.

Several of those interviewed say it was a complete shock when their relationship with KPMG was suddenly and unexpectedly terminated. In four of the instances reviewed by the FT, the firm applied a local labour rule, Article 77, which enables an employer to instantly fire someone without cause. In these four cases the employees’ work and residency permits — known as an Iqama — were also cancelled, meaning their right to remain in Saudi Arabia was suddenly revoked.

The abrupt terminations wreaked havoc. Several of those interviewed had moved their entire families to the Middle East and enrolled their children in local schools. But even for those without dependants the sudden dismissals were emotionally distressing and logistically complicated. Rental agreements, car leases and households filled with possessions — in short, their entire lives in Saudi Arabia — all needed to be immediately unwound.

“They were cutting me off from all financial resources with two days’ notice and this is unheard of,” says one former employee. “They are messing people’s lives up.” Another says he felt like he had been suddenly “put out on the scrapheap” and endured “complete and utter hell” in the years that followed. Once he returned to his home in Europe, he says he felt “a mix of shock, relief, exhaustion and in some respects, terror”. 

“They have literally just run a wrecking ball through everyone’s lives,” says a third former employee. “[Article 77] is a mechanism that terrorises the individual and is completely alien and incomprehensible to expats.”

No valid reasons were given for the sackings, according to those interviewed. The termination of three of the employees via Article 77 came after they had raised concerns internally about issues ranging from bullying, to poor governance, to potential fraud on the part of a client.

A former KPMG partner, who worked frequently in Saudi Arabia, says he witnessed colleagues being fired abruptly for no reason. He and several other former KPMG employees put this down to hostility towards westerners from the largely Arab leadership team at KPMG Saudi Arabia.

Racial tensions within the firm were a problem, several current and former insiders added, with xenophobic language towards certain nationalities commonplace and factionalism along ethnic lines the norm. “You wipe your nose wrong as a western expat and you can be dealt with harshly,” the former partner says.

KPMG Saudi Arabia says it launched an “internal transformation project” in 2021 aiming to “review and suggest improvements” to its human resources policies and processes, including a review of its employment contracts. The project is being spearheaded by members of its senior management team and their work has started to be put into practice this year, according to the firm.

“The health, safety and wellbeing of our people is the priority of KPMG Saudi Arabia,” it says.

‘It feels very unsafe’

Aside from the inconvenience and damage to careers and livelihoods, many of those who were dismissed say they felt real fear for their personal safety, in particular when the terms of their exits were being negotiated.

Three former employees say they were verbally threatened by certain members of KPMG Saudi Arabia’s senior leadership team — told to comply with the firm’s proposed exit agreement or face unpleasant consequences. “When people say [refusing to co-operate] will be very bad for you . . . it feels very unsafe. You don’t know what that means,” says one former employee.

None of those interviewed had any proof that KPMG Saudi Arabia would do anything to harm them. But the fear for their personal safety was shared by 10 individuals interviewed by the FT — some of whom held very senior roles in Saudi Arabia.

It demonstrates a breakdown in trust between the KPMG leadership team in the kingdom and the western expats there. Fears were exacerbated by the fact that KPMG Saudi Arabia has close ties to the government through its advisory contracts, causing staff to worry that levers of the state — including arrest, detention and imprisonment — could be pulled if they pushed back against the firm.

Several former employees suspected they were under some form of surveillance by KPMG Saudi Arabia while working in the kingdom. One says he was followed by a car whenever he left his compound while exit negotiations were ongoing. He says he had safety concerns “every day” during this period “and any time I stepped out of the security of the compound”.

Another former employee only agreed to speak to the FT from a hotel landline while travelling in Europe in case their mobile phone was being monitored. “As you know we are being watched in Saudi,” the person said.

A third former employee says that when he finally left Saudi Arabia for good, he deliberately took a circuitous route via Bahrain so as to avoid being tracked or blocked from leaving by the firm or its government contacts. He compared the behaviour of KPMG Saudi Arabia’s leadership and the fear it instils in employees to the John Grisham novel The Firm, a thriller in which a lawyer becomes entangled in a corporate plot. “I was in fear for my own safety,” he says. “I would not have taken my young family to the Middle East had I known. [That fear] just should not exist today.”

Half of the dozen interviewed say KPMG Saudi Arabia failed to pay them their salaries and bonuses in full, prompting some to resort to legal action to attempt to recoup their losses. Others chose to leave quietly rather than challenge the firm.

One of the latter group says his priority was leaving the country with his family in safety. “Any professional services firm is about the people who make up the firm — these are people who know people in authority in the country. If they needed something to be done, they could have done it . . . I boarded a plane and never went back, and I hope I never have to.” 

KPMG Saudi Arabia said in a statement: “We do not recognise the allegations that have been made, including those concerned with the safety and welfare of our people. As a responsible employer, we take them seriously and will continue to keep people matters as a top priority. We have robust processes in place to deal with complaints and grievances and continuously look to review and enhance our processes based on feedback from our people.”

The statement added: “At KPMG Saudi Arabia we create a safe environment for our people which is based on mutual trust and respect, where our people can fulfil their potential.”

Whistleblowers

In the absence of faith in the wider Saudi system — and, specifically, in the leadership team at KPMG Saudi Arabia — many of those interviewed were bewildered by an apparent reluctance on the part of KPMG International to intervene. KPMG International is meant to ensure all member firms in the KPMG network share the same values and high governance standards.

The FT has seen copies of three whistleblowing reports sent to KPMG International and chair Bill Thomas since 2018, alleging issues in the Saudi Arabia practice, including wrongful terminations, failure to pay staff and concerns about personal safety in the region.

The individuals who sent the reports say there is no indication that KPMG International has taken any action as a result. The firm continues to be run by Fozan, its chair and senior partner since 2000, while its all-male senior leadership team has barely changed over the past five years. The whistleblowers cannot comprehend KPMG International’s inaction. “When whistleblowing is triggered, the full force of KPMG International should kick in, and it doesn’t. They were hostile and aggressive to me. There is nothing of respectability in that firm — it’s the wild west,” says one.

Another two former employees say they raised concerns verbally with KPMG International leaders about practices in Saudi Arabia, to little effect. One says: “Global seem to turn a blind eye to this for the most part and hope it goes away. KPMG [Saudi Arabia] is not the KPMG I am used to and proud of. You wonder how bad it has to become before somebody actually takes action.” 

In a statement, KPMG International said: “As a global organisation, KPMG’s priority, at all times, is its people. Ensuring that they feel supported and cared for is a fundamental part of our global values.

“We encourage our colleagues, no matter where in the world they are located, to speak up if they feel something isn’t right, and we have a number of different, well-publicised mechanisms in place to enable them to do so as easily as possible. This includes our International Hotline. All reports to this hotline are confidential, so we are unable to comment on individual cases. Any concerns raised are, and will continue to be, reviewed and we take any action as needed. We never lose sight of the need to do what is right.”

One reason why the problems at KPMG Saudi Arabia are so conspicuous, insiders say, is because it is structured differently from the other Big Four firms in the Middle East.

Deloitte, PwC and EY have each brought their Middle Eastern operations under the control of one large entity run from Europe, so common standards tend to apply throughout the region.

KPMG, on the other hand, is a network of firms operating under the same brand but managed in each country by a local chief executive and chair, who often tends to own a large stake of the local entity. This makes each local partnership more independent and harder for KPMG International to control.

One former partner, who worked in Saudi Arabia and elsewhere for the firm, says: “What is fundamentally wrong with KPMG is its structure. Before that is fixed, there is no way on God’s earth that things will improve. Because it does not matter what KPMG [International] says, any partners in any region in the world will turn around and tell global — mind your own business. It is a franchise, not a real firm.”

Several insiders say a recent attempt by KPMG International to encourage its Saudi business and Lower Gulf practice, which operates in the United Arab Emirates and Oman, to merge was intended to improve standards at the two firms. But infighting meant the merger collapsed last year.

With complaints seemingly ignored by KPMG International and little sign of change at the Saudi practice, some of the insiders say speaking to the FT was their last resort to prevent other professionals from facing similarly abusive practices in the country.

For others, De Waal’s death shortly after his employment was terminated was the final tipping point in terms of speaking out. “If the firm takes a serious look at the methods they use [when making employees redundant] . . . then his death is not in vain,” says one former employee.

Another adds: “You would expect KPMG to hold higher standards. It is unbelievable. This was a case of abuse. It has taken me three years to get over that saga. They really push people mentally to the edge.” 

If you have an insight into related issues that could inform our reporting, please contact madison.marriage@ft.com. We want to hear from you. If your information is particularly sensitive, consider contacting us using one of these secure methods.

If you have been affected by any of the issues in this story and need help, you can reach the Samaritans in the UK on 116 123. The National Suicide Prevention Lifeline in the US is on 1-800-273-8255

The article has been amended since first publication to make clear that Saudi Aramco is no longer the world’s most valuable company.

Letter in response to this article:

FT’s take on business in Riyadh irks this reader / From Nigel Kendall, Worplesdon, Surrey, UK