Icpak asks Ciano to resign from disciplinary team

The Institute of Certified Public Accountants (Icpak) has pleaded with the chairman of its disciplinary committee Jonathan Ciano to resign on grounds of professional misconduct in an uncharacteristic show of weakness by a regulatory agency.

Mr Ciano, a former CEO of Uchumi Supermarkets, has been accused by the retailer of manipulating its financial statements to hide losses of more than Sh1 billion.

He has also been accused of conflict of interest after it emerged that he was supplying fresh produce to the Nairobi Securities Exchange-listed firm and paying himself in advance during his term as CEO.

“Upon receipt of complaints on allegations of gross misconduct, the chairman of the institute’s disciplinary committee is henceforth conflicted,” Icpak’s chief executive Patrick Ngumi said in a statement.

“And in the public interest and in the interest of the accountancy profession, the council of the institute has resolved and called for the chairman of disciplinary committee to step aside as investigations are concluded.”

The allegations have put Mr Ciano in a tight spot as he chairs the unit that is responsible for punishing errant members for misconduct.

Mr Ciano, whose turnaround credentials have taken a hit following the accusations, Wednesday said he is willing to resign but took issue with Icpak’s public call for him to do so.

“Once my accuser steps forward and gives the details I will step aside. It is a voluntary job,” Mr Ciano said in a telephone interview. “There are procedures and I am a professional,” he added.

Icpak’s decision to ask Mr Ciano to resign is based on the Accountants Act, which only envisages that a member of the disciplinary committee can leave voluntarily by resigning for any reason, including inability to execute his duties.

READ: Icpak says Ciano to remain committee chair until further Uchumi investigations

Once a member resigns, it is upon the Finance minister to appoint a new person to the position after receiving nominations from the respective stakeholders, including Icpak itself.

A member is entitled to serve up to two three-year terms.

Mr Ciano’s first term comes to an end later this year following his appointment by Treasury secretary Henry Rotich on December 30, 2013.

The law provides that a member of Icpak accused of professional misconduct be heard and, if found guilty, punished by the disciplinary committee through deregistration and fines among other penalties.

In its deliberations, the committee has more discretion than ordinary courts since it is not bound by the rules of evidence.

Icpak’s call for Mr Ciano to resign comes after it received a forensic audit from Uchumi touching on the alleged misdeeds of the former CEO and other senior managers.

“The institute assures its stakeholders that all disciplinary proceedings against its members will take due professional process as guided by law, the institute’s by-laws and natural justice,” said Dr Ngumi.

Icpak has said it will also launch its own investigations into the allegations that Mr Ciano cooked the retailer’s books.

“The company has also provided for … Sh1.04 billion which relates to items arising from management misrepresentation and manipulation of the system by the previous management,” Uchumi said when it released its results for the year ended June 2015.