KPMG insists court report on Mumias Sugar was factual

International audit firm KPMG has defended a forensic report that poked holes in Mumias Sugar company's operations during Nairobi Governor Evans Kidero's tenure as the firm's MD.

In its response to the governor's suit, the audit firm insisted the draft report was factual and was not drawn to taint Kidero's image.

According to KPMG’s partner Brian Desouza, the dossier was prepared on the basis that it would not be considered slander or libel if it mentioned anyone and thus could not be a basis of a suit against the firm.

In the case before High Court Judge Joseph Sergon, Mr Desouza argued that the report should have ended up with the Mumias Sugar management and the Government as they had interest in the operations of the struggling sugar miller.

KPMG prepared the report upon request from Mumias Sugar and it singled out individuals deemed to have been responsible for the sharp decline of the sugar firm, which plummeted from profit making to near breakdown in a span of three years.

“I verily believe that in the circumstances the publication by the defendant (KPMG) was on an occasion of qualified privilege. The defendant denies that the draft report contains any matter defamatory concerning the plaintiff in relation to the management of Mumias Sugar as alleged,” said Desouza.

REPORT FINDINGS

The partner in his court documents added that Mumias Sugar was also under obligation to report to Parliament what was happening as the government, through National Treasury owns 20 per cent of the sugar company.

“Mumias Sugar was under duty to report the findings of the investigations carried out by the defendant into the affairs of Mumias to the National Assembly in answer to the requests made by the National Assembly pursuant to Article 125 of the Constitution,” he said.

According to Desouza, Kidero had been given opportunity to respond to the allegations in the dossier but he opted to stay quiet. The KPMG partner told the court that Kidero had declined to respond despite letters being sent to him in regards to the same.

“The defendant did not prepare and draft the report maliciously or recklessly or without justification as alleged by the plaintiff (Kidero). On the contrary, the defendant carried out extensive investigations into the files and records of Mumias and gave the persons whose conduct was considered in the report, including the plaintiff, an opportunity of commenting and responding,” stated Desouza in a sworn affidavit.

The document cited the Nairobi Governor in irregular award of tenders worth millions of shillings, a claim Kidero refuted saying that he was cleared from the allegations made by KPMG in a full audit done by Deloitte and Touche.

MALICE

“KPMG withheld it from the public in its draft report that the allegations they were purporting to raise concerned issues that were already audited by Deloitte and Touche, whose opinion KPMG never sought in compiling the so-called forensic audit report,” stated Kidero.

Kidero stated in his lawsuit that the forensic report by KPMG tabled on July 8, last year, was driven by malice and was aimed at injuring his reputation and standing in the society.

He wants the court to issue a judgment against the audit firm for general damages and aggravated damages, including interest. Kidero accused the audit firm of publishing defamatory words against him that depicted him as a corrupt person.