Corporate News
By BRIAN WASUNA, bwasuna@ke.nationmedia.com
Posted Wednesday, September 23 2015 at 23:00
Posted Wednesday, September 23 2015 at 23:00
In Summary
- PwC says the vicious battle between foreign shareholders Rendeavour and their local partners Nahashon Nyagah and Vimal Shah has stalled a planned audit that the High Court ordered in May.
Consultancy firm PriceWaterHouseCoopers (PwC) has
declined to investigate offshore loan accounts of real- estate
development firm Tatu City following an intensified tussle between the
multibillion- shilling project’s local and foreign partners.
PwC on Wednesday told Justice Eric Ogola that the vicious
battle between foreign shareholders Rendeavour and their local partners
Nahashon Nyagah and Vimal Shah has stalled a planned audit that the
judge ordered in May.
The consultancy said the shareholders had failed to
sign an execution letter for the audit, hence it was not able to begin
the process.
The firm added that one of the parties in the suit
had made the anticipated audit part of a slander campaign, which fuelled
its disinterest in the job.
Justice Ogola ordered the audit following an
impasse between the shareholders on the actual position of loans taken
to buy land for the project initially estimated to cost $3 billion (over
Sh300 billion). PwC said the shareholders failed to agree on the terms
of the audit.
“The letter of engagement has not been signed by
the parties. There appears to be hostility between the parties which may
not allow us to proceed. We are a professional body and some
disparaging remarks have been made about PwC by one of the parties. We
therefore seek to withdraw from the assignment,” said the PwC lawyer
Peter Gachuhi.
The consultancy added that it wrote to the parties
in the suit stating that it was ready to start the audit, but did not
get the green light to look into the accounts.
Justice Ogola had granted the project’s partners
and PwC until Wednesday to file an audit report on the offshore loan
accounts. The judge also ordered the parties to appear before him on
October 1 for a hearing.
The audit was intended to verify the amount of
money borrowed from the offshore financiers since the project began, and
what balance was still owed to the lenders.
Foreign partners Stephen Jennings and Hans Jochum
Horn had in an earlier court application claimed Mr Nyagah and Mr Shah
had close ties with PwC and that they had tried to use that rapport to
manipulate the scope of the audit.
“The auditors, at the prodding of Mr Nyagah and Mr
Shah, perceive the scope of the audit to include carrying out background
checks on the financiers’ ownership whereas this exercise was to
determine the total loan amounts secured from inception and the
reconciliation on repayments,” said Mr Horn.
The shareholders’ dispute has raged since founding
of the project nearly five years ago. Mr Nyagah and Mr Shah claim the
foreign partners want to oust them and continue “mismanaging” the
project. But the foreign partners claim their two have abused their
trust and instead illegally transferred land intended for the project.
The Directorate of Criminal Investigations (CID)
has since called for the arrest and prosecution of Mr Nyagah over an
alleged grand scheme to defraud real-estate developer Tatu City of more
than Sh5 billion.
Detectives investigating transactions involving the
project’s subsidiaries have concluded that Mr Nyagah used close
relatives and associates to irregularly transfer shares worth Sh5.3
billion, and have recommended that he and five others be charged in
court.Mr Nyagah has however been granted a court order stopping his arrest
over the matter until a suit he filed challenging the validity of the
investigations is concluded.
No comments:
Post a Comment