KPMG to rerun election of UAE boss after governance complaints

KPMG’s boss in the United Arab Emirates has told staff the firm will rerun the election for his position and hire an external law firm to review governance after the Financial Times reported criticisms of his leadership and partner infighting.

The announcement came just weeks after unrest among partners at KPMG Lower Gulf, which people at the firm said was linked to the appointment of the brother-in-law of its chief executive and chair Nader Haffar to a senior position. Two senior partners who raised concerns about the issue were forced out of the firm, the people said.

Haffar and his brother-in-law Talal Cheikh Elard have been accused by employees of shouting at staff, slamming fists on tables and storming out of meetings.

Current and former partners had also raised governance concerns relating to a recent vote that extended Haffar’s tenure as chief executive by five years, insiders said. Partners had little notice of the vote and Haffar had faced no opposition, they added.

Partners also feared that the vote was not completely anonymous, raising the risk they would be vulnerable to retaliation if they did not approve Haffar’s re-election as head of the business, which operates in the UAE and Oman.

KPMG Lower Gulf said in a statement to the FT on Wednesday that it had hired an international law firm to review its governance “given the recent questions in relation to our governance, and our ongoing commitment to the highest levels of public trust”.

“Our governance and values are a critical part of who we are, and we take any questions raised about their rigour extremely seriously,” it added.

The new election process for the chief executive had been requested by Haffar and would also be overseen by the external law firm, said a person briefed on the matter. Haffar told staff on a call on Wednesday that he would run as a candidate.

KPMG International, the global organisation, which has been accused of failing to act on whistleblower complaints about the Lower Gulf business, declined to comment.

Current and former partners said the latest announcement looked like an attempt by Haffar to retain power. “Nader will have to be pulled off the steering wheel dead before he’ll leave the business,” said one former partner.

One partner said they were “not sure how much sense it makes to do the election” given the widespread fear among partners that those who challenge Haffar risk losing their jobs. “I don’t think there is anyone credible left now to even contest . . . the elections,” they said.

Haffar on Wednesday also told the firm’s 1,300 staff that KPMG Lower Gulf was searching for a new head of its tax division and announced it had appointed new heads of its advisory and back-office functions.

The firm’s chief operating officer Vassilis Theodoropoulos is also set to retire, he said.

KPMG Lower Gulf said it was not immediately able to comment on these personnel changes.