One of the Big Four consultancy firms, KPMG, and its former partner have been hit with legal action by bankrupt Manchester-based property developer Bashar Issa.
KPMG and former partner David Costley-Wood have been named on a claim listed in the High Court.
According to the particulars of the claim document, as seen by City A.M., Bashar bin Mahmood (known as Bashar Issa) owned several property development companies. However, in 2008, he instructed KPMG to assist with restructuring his business after the Irish Bank Anglo Irish Bank (AIB) went into bankruptcy.
The claimant had a £89m loan with AIB to develop a housing and mixed-use property.
The claim noted that Costley-Wood was a senior manager at KPMG and had introduced the claimant to the firm’s employees under his management.
Costley-Wood was the former head of the restructuring of KPMG Manchester. In 2021, the UK accounting watchdog imposed a £500,000 financial sanction on him along with a £13m on the firm in relation to their role in the Silentnight scandal. He left the firm that year.
According to the Manchester Evening News, Bashar Issa was forced into bankruptcy in 2009, and several of his many businesses were dissolved between 2011 and 2015.
Issa’s claim alleged that KPMG breached its duties, obligations, and confidentiality by using incomplete disclosure. He also alleges that the firm withheld relevant information about the Bank of Ireland, AIB, Barclays Bank, Yorkshire Bank, law firm Eversheds, the police, and more.
The claimant also faced a criminal investigation and was found guilty of tax fraud in 2013.
He alleged in his claim that the firm: “falsely informed their solicitors…. that they had no involvement in the criminals investigation against the claimant, causing those solicitors to make incorrect statements to the court.”
He also has several more allegations in his claim, including the firm’s failure to protect against a conflict of interest.
Issa is suing the firm and its former partner for £1.2bn in losses from all of his companies, which he detailed in the claim, including BSC Towers and BSC Development.
The claimant does not have any law firm or barrister listed in this case, and according to the High Court claim system, he is listed as a litigant in person. The Big Four firm is noted as having instructed law firm Stephenson Harwood for the claim.
A KPMG UK spokesperson said: “We believe this claim is entirely without merit.”