Bajan pop star Rihanna is suing her former accountants, accusing them of mismanaging her accounts between 2005 and 2010.
The singer, real name Robyn Fenty, is seeking tens of millions of dollars in damages and lost revenue, claiming that Berdon LLP collected exorbitant commissions even as they bungled her taxes. According to US accounting tabloid GoingConcern.com by the ‘Last Girl on Earth’ tour in 2009, Rihanna learned that the tour had managed "significant net losses" despite robust revenues.
The defendants managed to pocket 23% of the tour's total revenues while paying Rihanna just 6% of revenues, the lawsuit said.
Her lawyers wrote: "Between 2005 and 2010 [Rihanna's touring company] suffered significant losses due to defendants' financial mismanagement and other acts and omissions."
According to papers filed in a Manhattan federal court Berdon's unusual accounting practice of paying itself a percentage of gross tour income as commissions left it no incentive to "counsel" Rihanna to reduce expenses or put in place appropriate financial controls.
Berdon is also accused of keeping incomplete records, losing track of royalties, and botching US and international tax filings.
According to The Guardian the IRS is auditing the pop singer following three years of erroneous tax submissions.
About Robert Lovell
Business and finance journalist