PwC dragged into bitter Middle East legal battle

PWC has been dragged into a legal dispute between an Iranian-American entrepreneur and a Middle Eastern sovereign wealth fund.

The case, which began in the High Court two weeks ago, has seen Farhad Azima and the Ras Al Khaimah Investment Authority (RAKIA) trade increasingly outlandish blows.

RAKIA, the investment fund of one of the United Arab Emirates’ seven emirates, began by suing Azima for £3.7m, alleging the businessman made fraudulent misrepresentations and breached contracts relating to joint business ventures he was involved in.

It also claimed Azima, who runs a cargo airline with customers including the US Navy, orchestrated a ‘campaign of denigration’ against Saud bin Saqr Al Qasimi, the ruler of Ras Al Khaimah.

But Azima, who denies any wrongdoing, launched a counterclaim against RAKIA, accusing it of hacking his emails.

And in a twist in the murky case, Azima dragged City accounting business PwC into the spat.

Hugh Tomlinson QC, RAKIA’s barrister, accused Azima in court of backdating documents to justify a false £1m valuation of an aircraft simulator, which he actually bought for just £ 128,000. when challenged about this, Azima stated that the ‘auditor requested that’.

Referring to PwC, Azima added: ‘Pricewaterhouse very extensively reviewed that and they agreed to it.’

PwC – formerly known as Pricewaterhouse Coopers – was auditing Azima’s business, Heavy Lift International, in 2008, as Azima hoped a stamp of approval from the City firm would help him raise financing from banks to buy new equipment. But the practice of backdating documents is usually illegal, as those papers may not accurately reflect what was happening at the time.

Azima denies fraudulently backdating documents.