Internal strife at KPMG has caused division in the United Arab Emirates, where the CEO narrowly escaped a putsch attempt after two senior partners raised governance issues and were later fired.
According to current and former insiders, the Lower Gulf business of the accounting firm was thrown into disarray last week as a group of partners planned a secret vote to determine whether Nader Haffar, KPMG's CEO in the region since 2018, had lost their support.
According to the insiders, Haffar would have been fired if three-quarters of the firm's 60 partners declared they no longer trusted him.
However, according to one of the people, the uprising's momentum stalled on Friday, and the vote was canceled. "It looks like Nader has survived for now," the person said.
The executive committee of KPMG Lower Gulf included the two senior partners who lost their jobs over the past month. Insiders claimed they had brought up perceived conflicts of interest involving Talal Cheikh Elard, Haffar's brother-in-law, who joined the company as a partner, head of clients and markets, and member of the executive committee last October. Further shocking the firm was the dismissal of a third senior partner.
Requests for comment from the three were not answered.
Both Majid Al Futtaim Group, an Emirati real estate and retail conglomerate, and Dubai World, an investment firm that represents the Dubai government's interests, are clients of KPMG Lower Gulf. According to sources at the company, it also counsels the Abu Dhabi National Oil Company and the sovereign wealth fund Mubadala Investment Company.
Current and former KPMG insiders have characterized Haffar as having a "volatile" temperament and a history of conflicts with coworkers in his previous positions at Deloitte and KPMG Saudi Arabia.
Similar worries expressed by some KPMG employees about the CEO were also highlighted in internal documents and emails examined by the Financial Times.
KPMG International and KPMG Lower Gulf issued identical statements that read, "whilst we are not able to comment further on the specific matter raised, we take any allegations of this nature extremely seriously. We encourage all colleagues to speak out if they see or hear anything they consider to be inappropriate, and take action as necessary."
Requests for comment made through KPMG were not answered by Nader Haffar or Talal Cheikh Elard.
The problems at KPMG Lower Gulf, which has operations in the UAE and Oman, will also draw attention to the international division of the Big Four firm, which takes pride in promoting a common set of values and standards throughout its global network of member firms, which together employ more than 236,000 people.
Partners at rival firms claimed that KPMG's business in the Gulf was more dispersed while some Big Four firms had taken steps to centralize control of their operations in the region. One person claimed that the Middle East division of KPMG consisted of "fiefdoms controlled by individual partners." The phrase "a disastrous collection of individual firms who argue with each other" was used by another.
The turmoil began shortly after it was revealed that Ashish Kandelwal, the head of deal advisory at KPMG Lower Gulf, was preparing to leave for a position at a competing Big Four firm. He was in charge of one of KPMG's most lucrative accounts with the Abu Dhabi sovereign wealth fund, ADQ, so his departure would be a big loss. Requests for comment from Kandelwal went unanswered.
By fLEXI tEAM