Iraq's Odious Debts

Firms square-up over Iraq debt

Larry Schlesinger
Accountancy Age
May 11, 2004

BDO Stoy Hayward and Ernst & Young are likely to face each other on opposite sides of the fence as they attempt to unravel Iraq’s long-term debts.

Mid-tier firm BDO is currently talking to a wide range of organisations owed money by the Iraqi administration as part of a trade creditors committee it is setting up, while Ernst & Young has been employed by the US-led Coalition Provisional Authority to identify and quantify the debts owed by Iraq to organisations and businesses around the world.

In essence what this means is that E&Y will be trying to reduce the amount owed to creditors and BDO will be looking to maximise debt repayments to creditors.

Peter Daniel, partner in forensic accounting at BDO, said the total long-term debts owed to trade creditors were in the region of between £8bn and £13bn.

‘We will discuss things [with E&Y] and get to a position where there is an agreement,’ Daniel told

Daniel said it would be a two-part process for BDO: firstly the debt must be reconciled and then it must be restructured.

In the restructuring phase BDO is working in partnership with the Turan Corporation, an investment bank with experience in the Middle East, and will aim for an early realisations of debts, ‘am early route out’.

Daniel added that some of the debts date as far back as the 1980s so documentary evidence would be limited.

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