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A London judge ordered, Friday, an Ernest & Young (EY) unit to provide additional documents on a Dubai-based gold firm, that is accused of importing over $200 million of gold coated in silver from Morocco, legal news service Law360 reported.
According to the ruling of Deputy High Court Judge Gavin Mansfield, a former partner at an EY Middle East outpost «was concerned documents» related to the case «were being wiped out». The judge accepted Amjad Rihan’s request for information about «EY’s document retention policies».
Gold refiner Kaloti hired in 2013 EY Dubai to do an audit on its gold sourcing practices. The audit was requested by the Dubai Multi Commodities Centre (DMCC), a body established in 2002 by the Government of Dubai to provide the physical, market and financial infrastructure required to establish a hub for global commodities trade.
Moroccan gold coated in silver
Amjad Rihan said he was leading the audit team, which discovered that «Kaloti had imported over $200 million of gold coated in silver from Morocco and had declared that gold as silver to the Moroccan authorities and as gold to the Dubai authorities».
Quoted by the same source, Rihan said that his team at EY «concluded the company had conducted cash transactions of $5.6 billion with no reports to any authorities in Dubai or the United Arab Emirates».
The suit revealed that Ernst & Young Global Ltd and its regional units failed to report the findings to the authorities. Rihan who «took his concerns to EY higher-ups, who did nothing», ended up resigning and leaving Dubai.
Once in London, he decided to sue EY, accusing the firm of «breaching a common law duty of care to investigate and respond to his concerns and mitigate the 'foreseeable' risks to his safety». EY firmly denied Rihan’s accusations.
Replying to accusations, Kaloti said in a communiqué that «these allegations are false and without any substantiation», adding that «has strongly denied these claims and any implication relating to regulatory non-compliance in the gold trade».
«There is absolutely no evidence that Kaloti falsified any documentation», it stated, stressing that it had «full KYC documentation on all its Moroccan clients and had proper import documentation and invoices stating that this particular consignment was gold from Morocco».
The trial, which began in 2014 with the appeal filed by EY former partner, is expected to take place in January 2020. Judicial sources told French-language newspaper Le Desk last year that Morocco is working with Britain on the case.
