Tatu City foreign investors absolved from audit blame

The Court of Appeal has absolved Tatu City foreign investors from blame on audit standoff for the company finances following a long-drawn legal battle with the Kenyan minority shareholders in the Sh240 billion project.

Consequently, the international investors withdrew an appeal over the matter after the court ruled that they had no case to answer.

Through lawyer Issa Mansour, they said the Court of Appeal had already absolved the foreign directors, led by businessman Stephen Jennings (pictured), of alleged resistance to sanction an audit of the firm’s financial records.

Appellate judges Roselyne Nambuye, Asike-Makhandia and James Otieno-Odek yesterday ruled that the directors were at liberty to shelve the appeal after the court invalidated contempt proceedings against them on February 23.

Justices Asike-Makhandia, William Ouko and Kathurima M’Inoti had ruled that the directors Tatu City and Kofinaf Ltd enjoyed exclusive mandate to appoint auditors and there was no evidence the five investors had wilfully disobeyed High Court orders to frustrate the exercise.

 They had said Commercial Court judge Francis Tuiyot erred in his ruling on May 4, last year, by attempting to interfere with the internal affairs of the two companies, whose directors have disagreed on the appointment of an audit firm to replace PricewaterhouseCoopers (PwC).

“We are not convinced there was evidence to support the assertion that the appellants completely frustrated and scuttled the commencement of the in-depth audit by intimidating PwC.

Indeed, the learned judge himself expressed satisfaction from the correspondence and affidavits before him that there was an attempt by the parties and PwC to agree on the modalities of the in-depth audit. It was, therefore, in error for him to mistake protracted negotiations for a stone-wall,” the three-judge Bench had held.

They said the judge erred in finding that Jennings, Frances Holliday, Pius Ngugi, Frank Mosier and Christopher Barron had deliberately disobeyed court orders issued on June 12, 2015 regarding the appointment of the auditor in accordance with the decision made by the board of directors on January 28, 2015.

Show More

Related Articles