ICPAK asks Tuskys boss to back claim against Deloitte
Mr Yusuf Mugweru (left) with advocate Philip Murgor (second left) and friends outside a Nairobi court last year. PHOTO | FILE
What you need to know:
Watchdog seeks evidence on audit firm’s alleged role in abetting Sh1.6bn fraud.
The accounting professionals’ watchdog has written to a director of Tuskys Supermarkets asking him to submit additional information that will help investigate audit firm Deloitte & Touché for allegedly abetting fraud at the retail chain.
The Institute of Certified Public Accountants of Kenya (ICPAK) wants Yusuf Mugweru, a director at Tuskys, to supply more evidence to begin disciplinary hearings into the Sh1.6 billion swindling claims against Deloitte.
Mr Mugweru in February 2013 filed a complaint with ICPAK alleging that Deloitte and Livingstone Associates — the retailer’s auditors and company secretary respectively — aided the siphoning of cash from Tuskys through new companies.
“We are yet to receive the requested information and are thus continuing to hold the matter in abeyance,” said ICPAK in a letter sent to Mr Mugweru through his lawyer, Philip Murgor.
“We should be grateful if you would kindly provide us with further information to enable us action on this case,” reads the letter dated August 29.
If the Tuskys case proceeds to the ICPAK disciplinary committee, it will be the second time Deloitte is being investigated by the watchdog.
The watchdog said recently that it was set to make public its findings of an inquiry into how Deloitte handled the financial statements of CMC Holdings, whose directors were accused of maintaining a secret overseas slush fund that cost shareholders up to Sh1.2 billion.
Mr Murgor faulted ICPAK for not specifying the additional material required in the disciplinary case against Deloitte and its affiliate, Livingstone Associates.
“We made very specific demands in our filings to ICPAK, and attached all the necessary information,” he told the Business Daily in an interview yesterday. Mr Mugweru, who owns 17.5 per cent of Tuskys, is also the administrator of his late father’s estate.
Tuskys is Kenya’s second-largest retailer by revenue after Nakumatt. It has a total of 54 outlets in Kenya and Uganda.
“In early 2012, after I inserted much pressure, Livingstone Associates and Deloitte & Touché disclosed to me and my advocate of the existence of a number of companies, without giving sufficient explanation or at all, that had started appearing in the financial statements of Tusker Mattresses Limited,” reads an affidavit filed by Mr Mugweru.
“In view of the above circumstances, and the duties imposed by law upon Livingstone Associates and Deloitte & Touché, the conduct of Ms Jumba and Mr Kiarie is both unethical and unprofessional.” Ms Winniefred Jumba is a senior manager at Livingstone Associates and Mr John Kiarie is a partner at Deloitte — both responsible for Tuskys files.
The sibling feud at Tuskys Supermarket burst to the public limelight in April 2012 when managing director Stephen Mukuha assaulted his brother Mugweru when they differed on the accounts of the retail chain.
Mr Mugweru argues that related companies and subsidiaries such as the defunct Enkarasha, popMEDIA, Kenspore, Magic Pay and Ndykak Investments were registered without the mandate of the Tuskys board.
He claims that his brothers Stephen Mukuha, George Gashwe and Frank Kamau have been drawing funds from the retailer to these entities.
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