Jordan's Amwal Invest suing Ernst and Young over alleged fraud
In 2011, a small group of activists and shareholders informally investigated the performance of the company, discovering several instances of corruption.
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A lawsuit has been filed accusing the accounting firm Ernst & Young in helping the former directors to hide financial problems at Jordan-based investment bank Amwal Invest. Amwal Invest is asking for JOD 77.5 million (110 million USD) for its shareholders in damages and attorney's fees from E&Y.
The lawsuit was filed by Amwal Invest Attorney Ghandi Qawasmi in a Jordan court. Qawasmi said that the lawsuit is one of the first legal actions stemming from anti-corruption trends in Jordan. The claim cites violations of the Jordan Company Act and violation of more than eight International Audit Standards.
The lawsuit alleges that Ernst & Young conspired with the former Board of Directors of Amwal Invest in a scheme to shuffle tens of millions of Dinars from its balance sheets in order to boost the appearance of Amwal Invest’s liquidity.
Amwal Invest is a public company with capital of JOD 45 million and more than 7,800 shareholders. In 2011, a small group of activists and shareholders informally investigated the performance of the company, discovering several instances of corruption. A statement on Amwal Invest’s website cites, “The main corruption case in Amwal Invest story was the so-called Sara Transaction, where the company bought Real Estates valued at JOD 37 million from its Chairman, Mr. Fayez Faouri, the Chairman, which has been marked as a conflict of interest.”
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