Evans Kidero sues KPMG for linking him to Sh300m loss at Mumias Sugar Company

Nairobi Governor Evans Kidero speaks at an event on March 9, 2015. On April 1, 2015, he filed a defamation case against audit firm KPMG over Mumias Sugar dossier. FILE PHOTO | SALATON NJAU |

What you need to know:

  • The Nairobi governor claims the audit firm deliberately failed to refer to all executive committee meetings and misled the public into believing that the report was prepared for exclusive use by the company.

  • Dr Kidero is unhappy with KPMG’s conclusion that he approved payment of Sh65.8 million to Shah Kanji for fertiliser distribution without approval by board tender committee.

  • He defended his nine-year tenure at the helm of the troubled sugar miller, and gave year-by-year accounts of the profits the company made under his leadership.

  • He claims the KPMG report was based on falsehoods meant to discredit his character and portray him as a corrupt individual not worthy to be entrusted with a public office.

Nairobi Governor Evans Kidero has sued audit firm KPMG for linking him to irregularities that saw Mumias Sugar Company lose of over Sh300 million.

Dr Kidero claims the report by KPMG, was used by the anti-corruption commission to include his name in the list of shame released on Tuesday, is false, inaccurate, misleading and meant to tarnish his reputation.

“Despite admitting that they did not interview me to make clarification, they proceeded to make unqualified allegations about what they perceived as indictment against me in managing Mumias Sugar Limited,” says Dr Kidero in the suit filed on his behalf by Senior Counsel Tom Ojienda.

OJIENDA VS EACC

At the same time, Prof Ojienda filed a separate suit against the Ethics and Anti-Corruption Commission for alleging that he received Sh300 million legal fees from Mumias for services not rendered.

The lawyer wants to stop the commission from investigating his accounts, saying the warrants allowing the investigators to access them were obtained irregularly through collusion with the Kibera Chief Magistrate.

“As a matter of fact, it is Mumias Sugar that owes me Sh100 million for legal services I have rendered since 2011. The company has never complained to anybody which shows that by purporting to investigate my bank details, EACC is acting maliciously and abusing public power entrusted to them,” argues Prof Ojienda.

He swore that ever since the company procured his services in 2011, he has executed all transactions with due diligence and wondered why EACC singled out his law firm for investigations when Mumias Sugar has contracted 12 other law firms for legal services.

NULL AND VOID

Prof Ojienda wants the court to declare that the warrants to investigate his accounts are null and void, and order Director of Public Prosecutions Keriako Tobiko to investigate the conduct of EACC officials.

In the suit against KPMG, the Nairobi governor claims the audit firm deliberately failed to refer to all executive committee meetings and misled the public into believing that the report was prepared for exclusive use by the company.

Dr Kidero is unhappy with KPMG’s conclusion that he approved payment of Sh65.8 million to Shah Kanji for fertiliser distribution without approval by board tender committee.

He adds that the audit firm maliciously said he illegally approved tube brushing services to Jaico Construction Ltd, and that he irregularly approved another Sh34.5 million payment to Eldoret Packers for fertiliser distribution.

DEFENDED TENURE

“The firm also caused to be published statements that I irregularly awarded a contract to Keybay Holdings Ltd for fumigation services, and that I approved illegal discounts totalling Sh238 million,” said Kidero.

According to Dr Kidero, KPMG alleged he awarded discounts and credit notes without due process when they did not understand what informed the awarding of the discounts.

He defended his nine-year tenure at the helm of the troubled sugar miller, and gave year-by-year accounts of the profits the company made under his leadership.

According to Dr Kidero, the KPMG report was based on falsehoods meant to discredit his character and portray him as a corrupt individual not worthy to be entrusted with a public office.

“When I joined MSC in 2003, I found a rundown company on the verge of collapse with losses totalling over Sh244 million for the 2002/2003 financial year. But with the support and dedication of my team, the company became a success story year in, year out,” swore Kidero.

LOSS STREAK

He said the company made a profits of Sh1.1 billion for the 2003/2004 financial year, Sh1.8 billon (2004/2005), Sh2.5 billion (2005/2006), Sh1.9 billion (2006/2007), Sh1.5 billion (2007/2008), Sh1.1 billion (2008/2009), Sh2.1 billion (2009/2010), Sh2.6 billion (2010/2011) and Sh1.7 billion (2011/2012).

He said that it was only after he left the company in 2012 that it reverted to its loss making streak.

The governor wants KPMG stopped from further publication of the report and an order for compensation for defamation.