Former directors and auditors of local car dealer CMC Holdings will to walk away with fines of just Sh20,000.
This is after the High Court struck out an appeal by the Capital Markets Authority (CMA).
The court threw out the appeal filed by CMA against a disciplinary committee of the Institute of Certified Public Accountants of Kenya (ICPAK) whose decision was seen to be too lenient. In his judgment, Justice J. K. Sergon said it would appear no adverse orders were made against the external auditors, though there were some findings of breach made by the council against them.
The Judge said the court had limited jurisdiction in hearing the appeal. “In the end, I find that the appellant has no right of appeal and that this court has no jurisdiction to hear and determine the appeal,” the court ruled. CMA, which had put up a spirited fight to reverse the decision, said it appointed a South African forensic firm Webber Wetzel to conduct independent investigations into the affairs of CMC Holdings.
The findings from the audit saw CMA come up with 15 grounds to support its case.
The report revealed inadequacies in book keeping and audit.
CMA had argued that ICPAK’s disciplinary committee erred in by disregarding and failing to consider crucial facts filed.
“The disciplinary committee of ICPAK … erred by failing to apply their mind and expertise to the full spectrum and on all the issues raised by the appellant on the matter of CMC Holdings Ltd to enable them give adequate weight and attention to the severity of the issues in the complaint and the implications thereof,” CMA argued.
The regulator argued that despite ICPAK also finding that former CMC finance boss Sobakchand Shah was culpable and guilty of professional misconduct for failure to disclose the existence of offshore accounts, its disciplinary team erred by making recommendations that were lenient.
It said Shah also failed to disclose the existence of Southern Sudan subsidiary and the existence of conflict of interest. CMA said the accountants body also failed to give due regard to the implications of such lenient recommendations among others.
ICPAK had considered the allegations against Sobakchand Shah, Anne Muraya and Harveen Gadhoke, Doreen Mbogo, Anne Muraya and Wamae Kiarie Mugo of Deloitte & Touche.
ICPAK’s disciplinary committee also suspended their membership for two years and imposed a fine of Sh20,000 and costs of Sh50,000.