Kidero gets order to stop circulation of KPMG report on Mumias Sugar

Nairobi Governor and former Mumias chief executive of Evans Kidero has obtained a court order barring audit firm KPMG from further publishing its draft report on the status of the ailing sugar miller.

Justice Joseph Sergon ruled that being a draft report, KPMG should not have forwarded the document to Parliament as it was incomplete.

He held that only the final report can indemnify KPMG from defamation, and has hence stopped the company from further publishing it until Mr Kidero’s suit is determined.

The governor in the suit faulted the audit firm for presenting the report to Parliament, arguing that it was an incomplete document intended for Mumias Sugar’s exclusive use.

The document, he added, contains untrue and defamatory statements about him that he was not given a chance to respond to.

KPMG had in its defence said the mismanagement accusations made against Mr Kidero were justified and privileged, but the judge ruled in favour of the governor.

“The defence of justification can only be invoked when the final report has been made and submitted to Mumias. In the circumstances, I am convinced that on the face of it Mr Kidero has a case with high probability of success and unless the order is granted, he is likely to suffer irreparable loss,” the judge said.

KPMG prepared the report on demand from Mumias Sugar, which is seeking to bring to book the individuals responsible for its sharp decline from one of the country’s most profitable sugar millers to a near collapse in just three years.

READ: Kidero dismisses KPMG’s forensic report on Mumias

The audit firm forwarded its draft report to the clerk of the National Assembly on instruction from the then managing director Coutts Otolo.

Mr Kidero was chief executive of the sugar miller for a decade before joining politics in 2012.

Though the company recorded profits during his tenure, its sudden decline into financial distress necessitated a forensic audit going back to his time at the helm.

The KPMG report implicates the Nairobi governor in the irregular award of tenders worth millions of shillings. Mr Kidero however says that he was absolved of the allegations made by KPMG in a full audit of the struggling sugar miller under his tenure as CEO between 2002 and 2013 done by Deloitte and Touche.

KPMG in its response to the suit insisted that it reached out to Mr Kidero on several occasions seeking to interview him over the allegations, but that the Nairobi governor was yet to grant the audit firm audience.