Brooge Power Buyers File Fraud Grievance In opposition to Ernst & Younger

By Anna Hirtenstein

(Reuters) – Some Brooge Power shareholders have filed a U.S. fraud lawsuit in opposition to Ernst & Younger, alleging the auditor did not determine false income within the firm’s two years of annual reporting oil storage.

The plaintiffs are Stephen Cannon, Bryant Edwards and Neil Richardson, who have been buyers in a so-called particular goal acquisition firm (SPAC) that bought Brooge in 2019, in keeping with the submitting in U.S. District Court docket within the Southern District of New York. .

The plaintiffs allege that Brooge fabricated revenues amounting to tens of tens of millions of {dollars} and that Ernst & Younger’s audit of the corporate was fraudulent.

Ernst & Younger didn’t instantly reply to an electronic mail and telephone calls in search of remark. Brooge additionally didn’t reply to an electronic mail in search of remark.

Brooge agreed to a settlement with the US Securities and Change Fee in 2023 over fraud fees, which concerned paying a $5 million positive.

“The elemental monetary image introduced by Brooge to plaintiffs was a fraud: in reality, Brooge fabricated between 30% and 80% of his 2018, 2019, and 2020 revenues,” the submitting states.

“Brooge couldn’t have applied this undertaking with out the essential assist of Ernst & Younger.”

Brooge, an oil storage rental firm primarily based in Fujairah, United Arab Emirates, was established in 2013 and counts Mohammed bin Khalifa, the eldest son of the previous UAE president, amongst its shareholders.

Brooge inventory closed at $1.585 on Tuesday, down from a excessive of $12.99 reached in March 2020.

The board of administrators of Dubai-listed delivery firm Gulf Navigation in September authorised the acquisition of firms and belongings owned by Brooge, together with a capital improve, in keeping with the official UAE Information Company united WAM.

Certainly one of Brooge’s strains of enterprise was Coral Power Pte. Ltd., in keeping with the submitting. Coral was later renamed 2Rivers and was sanctioned by Britain on Tuesday for allegedly taking part in a key position within the Russian oil commerce.

(Reporting by Anna Hirtenstein; enhancing by Mark Potter)