LONDON: A Dubai court could hear evidence relating to the alleged role of auditor Deloitte & Touche (M.E.) in the collapse of Lebanese Canadian Bank – which went bust after being linked to an international drug smuggling and money laundering racket with ties to Hezbollah.
It follows a ruling in a legal row between a group of investors in the collapsed Lebanese Canadian Bank and the regional Deloitte partnership of the auditor, over whether or not the Dubai International Financial Center (DIFC) Courts had jurisdiction to hear the case.
The shareholder group is led by Nest Investments Holding SAL, which was founded by Gulf entrepreneur, Ghazi Abu Nahl. They claim they lost some $128 million from the collapse of the bank.
A Nest spokesperson said: “The allegations against Deloitte & Touche (M.E.) are serious in nature – involving complicity in money laundering and terrorist financing through the Lebanese Canadian Bank. The defendant plays a prominent role in the Middle East audit market and remains the auditor in liquidation at the bank. It is therefore particularly important that the allegations against DTME be heard and answered in a competent court.”
The case stems from a US government probe into the Beirut-based Lebanese Canadian Bank which alleged that it was at the center of a global drug trafficking and money laundering network that shipped narcotics from South America to Europe and the Middle East through Africa, with the proceeds laundered through Lebanon’s financial system.
The investigation led the US authorities to issue a so-called “FinCen” notice on Lebanese Canadian Bank as a “financial institution of primary money laundering concern.”
Such notices, issued under the US Patriot Act, typically sound the death knell for banks because they effectively prevent them from accessing the global financial system.
A group of 11 shareholders including Nest launched proceedings at the Dubai International Financial Center Courts in 2016, alleging that Deloitte & Touche (M.E.) acted negligently during its audit of the bank and failed to identify grounds for concern under anti-money laundering laws.
The audits were undertaken by Deloitte’s Lebanon partnership between 2006 and 2009.
One of the central claims made by the shareholder group was that the audits of the bank failed to disclose various illicit activities at the lender, that included terror financing and money laundering.
Specifically, it was claimed that Lebanese Canadian Bank had intentionally or negligently aided and abetted terrorist activity by maintaining bank accounts for Hezbollah entities.
Deloitte & Touche (M.E.) had argued that the case should be dismissed for jurisdiction-related and other reasons — including that Lebanese law, not DIFC law, applied.
But a judgment handed down by Justice Roger Giles in the DIFC Courts found that while Lebanese law was indeed applicable, the “matters were open to factual and legal investigation at trial and were not so clear that the claimants had no real prospect of success.”
He added that “further materials were likely to become available to show the relationship between the claimants and the Lebanese auditor.”
Nest hailed the decision as a “landmark” ruling.
“This is the first claim of its kind to be considered by the DIFC Courts – targeting a leading audit brand for negligence and deceit in their audits of a client bank that was allegedly acting as the financial arm for drug traffickers and terrorist financiers,” it said in a statement.
A Deloitte & Touche (M.E.) spokesperson said in a statement to Arab News that the claim against the firm was “without merit” and that it would vigorously resist any attempt to pursue it.
Dubai court can hear case against Deloitte unit after collapse of Hezbollah-linked bank
Dubai court can hear case against Deloitte unit after collapse of Hezbollah-linked bank
RLC Global Forum highlights role of Saudi youth in retail digital shift
RIYADH: Saudi Arabia’s young and highly digital population is reshaping how the Kingdom’s retail sector adopts new technologies and artificial intelligence, advancing faster than many global competitors, industry leaders told Arab News.
Speaking on the sidelines of the RLC Global Forum in Riyadh, executives told Arab News that the intersection of a youthful population and strong investment in AI is driving a shift in the industry’s priorities.
From understanding consumer behavior to leveraging the Kingdom’s growing status as a global AI leader, Saudi Arabia is becoming as a unique destination for the retail sector to thrive, learn, and evolve in the digital sphere.
Abdullah Al-Tamimi, CEO of commercial real estate company Hamat Holding, told Arab News that the firm is keen to analyze and understand consumer behavior, with a particular focus on the younger generation as a key part of that insight.
“Actually, it’s a big part of our day-to-day operation,” he said, adding that the company invests heavily in understanding customer needs and behavior and works to correct any missteps.
Al-Tamimi emphasized paying close attention to small details, noting that younger consumers are especially sensitive to the overall experience and “deserve that we work around the clock in order to improve it.”
He added that this focus “can be a competitive advantage for Saudi Arabia as well.”
Al-Tamimi said that as the younger generation grows accustomed to new technology shaping retail customer experiences, Hamat Holding is leveraging AI to enhance them further.
“We started a couple of initiatives improving digitalization,” he said, adding that the company sees digital tools as a way to enhance its work by automating day-to-day operations and allowing teams to focus on bigger-picture and more complex tasks.
While the firm has expanded its use of technology, he stressed it has not replaced human workers, emphasizing the continued importance of human capital for creativity and interaction. “AI is a big part of our strategy,” Al-Tamimi added.
Amit Keswani Manghnani, chief omnichannel and AI officer at luxury goods retailer and distributor Chalhoub Group, told Arab News that bridging a younger customer base with continuous digital development is key to advancing the Kingdom’s retail strategies.
On Saudi Arabia’s demographics, he said: “We look at 2030 as really building products which serve especially the younger population, which is growing and very digitally savvy.”
Manghnani underscored the unique characteristics of the Kingdom’s retail market as a tool for developing effective products and customer experiences.
“So it’s very digitally savvy, much more than in other markets,” he said, noting that e-commerce penetration is rising not only through online purchases but also via digital catalogs that drive in-store visits.
Manghnani said investment is focused on making products more digitally accessible and easier to use, while strengthening customer service to meet the expectations of what he described as a demanding but welcome consumer base. “Service excellence, digital — all these things together are how we are tapping into the younger population, which again is extremely savvy.”
Manghnani reinforced Al-Tamimi’s point that the Kingdom holds a competitive advantage, citing the speed at which its retail and technology industries are aligning.
“As a market, we’re tending to see the adoption of digital,” he said, referring to AI, data and other forms of digital interaction, adding that these tools are increasingly being combined.
He noted that this market is moving “much quicker than the other markets.”
The two-day RLC Global Forum brought together more than 2,000 global leaders, policymakers, and innovators from over 40 countries over the two-day event to define the next chapter of growth across retail, consumer, and lifestyle industries.
