EY has been accused of helping a United Arab Emirates oil storage business carry out a fraud against investors in a US special acquisition company, the latest lawsuit to hit the accountancy firm about an audit of a fraudulent company. In a lawsuit filed in the Southern District of New York last week, a group of Brooge Energy shareholders accused EY of having a “pivotal role in a years’ long scheme” to help the Fujairah-based company defraud investors in a 2019 Spac transaction.
The US Securities and Exchange Commission announced fraud charges against Brooge a year ago, alleging that the company had for years used “false invoices” to inflate revenues by as much as 80 per cent. Brooge agreed to settle the SEC’s charges that found the company violated various federal securities laws. EY issued an unqualified audit opinion for Brooge’s 2017 and 2018 accounts, during which time the company claimed it had contracts with two commodity trading firms.