PriceWaterhouseCoopers (PwC) has been allowed to audit offshore loans borrowed for the Tatu City project. The audit firm was given the green light by the High Court Monday to carry out the audit of the multi-billion shilling project within 45 days.
The decision by High Court judge Eric Ogola came after opposition from foreign shareholders. The foreign directors claimed that the firm could not give a balanced finding based on its link to local Tatu City Directors Nahashon Nyaga and Vimal Shah.
“The application is dismissed and PwC should continue carrying out the audit of the venture,” Mr Ogola said. The project estimated to be worth Sh240 billion has stalled over several suits before the court.
Conflict of interest
In the dismissed application, the court heard that the former Central Bank governor had been audited by PwC and that the same firm was carrying out an audit at Bidco thus allegedly creating a link between the firm and the directors.
The audit is expected to confirm the amount borrowed since the inception of the project, being Tatu City Ltd and its sister company Kofinaf Company Ltd, and the current status of the loans.
Norwegian Director Hans Jochum Horn had claimed that the firm was overstretching its mandate contrary to the court’s direction given on March 6. In his application, Mr Horn sought to have PwC substituted with either Ernest & Young, Deloitte, KPMG or any other international forensic audit firm.
Through his lawyer Tom Macharia, Horn argued that there was a likelihood that Nyaga and Shah would alter the course of the probe.
“The auditors, at the prodding of Mr Nyagah and Mr Shah, perceive the scope of the audit to include carrying out background checks on the financiers’ ownership whereas this exercise was to determine the total loan amounts secured from inception and the reconciliation on repayments,” Horn claimed.
In response, the two argued that the selection of the firm had been done by the board and not by themselves.
Horn and New Zealander Stephen Jennings hold a major stake in the project. They have however been embroiled in a legal battle since February, after Nyagah and Shah moved to court over shareholding wrangles.
Nyaga and Shah claim that their foreign counterparts want to kick them out of the project so as to freely control Tatu City and Kofinaf assets and capital.
The Standard Group Plc is a
multi-media organization with investments in media platforms spanning newspaper
print operations, television, radio broadcasting, digital and online services. The
Standard Group is recognized as a leading multi-media house in Kenya with a key
influence in matters of national and international interest.
join