Professional services firm EY has become embroiled in an alleged Australian coal quality scam, accused by an anonymous whistleblower of having turned a blind eye to the fraudulent behaviour.
The claims of misconduct against the global mining companies were raised in parliament by independent MP Andrew Wilkie, and are somewhat reminiscent of a previous incident which landed EY’s Middle East branch in hot water.
According to Wilkie, he has received thousands of documents from a whistleblower said to be an executive within the coal industry, which purport to show that miners TerraCom, Anglo American, Glencore and Peabody together with the Macquarie Bank and auditor EY as intermediaries engaged in activities to inflate the quality of Australian coal exports – thereby increasing its price and minimising pollution-related import restrictions.
“They’re paying bribes to representatives of their overseas customers to keep the whole scam secret. And this has allowed them to falsely claim, for years, that Australian coal is cleaner than coal from elsewhere, even though it’s often simply not true,” Wilkie alleged in parliament on Monday, with a number of fellow independent MPs including former Boston Consulting Group principal Kate Chaney backing his calls for an enquiry.
The allegations centre around the supposed manipulation of results in tests conducted by laboratory ALS to suggest the coal, destined for markets in India, South Korea, China and Japan, was of a higher quality than...
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