KPMG faults Illovo Malawi in multibillion Kwacha fraud: Case adjourned

The high profile civil case involving Illovo Sugar Malawi (ISM) resumed this week when one of the partners at KPGM, an international accountancy and audit firm, were grilled on audit report the company produced for the sugar manufacturer.

On Tuesday, lawyer Davies Njobvu representing minority shareholder Prudential Holdings Ltd (PHL) – which dragged Illovo to court- quizzed Gordon Tembo, KPGM senior auditor, which made its own assessment of the accounts of Illovo Sugar Malawi for several years.

KPGM in its own opinion revealed that the audited Illovo Sugar Malawi’s accounts were misleading.

Tembo was also grilled by Illovo Sugar Malawi’s lawyer Shabir Latif, SC on the presented documents, and the auditor stood firm on his evidence.

Meanwhile, the case has been adjourned to January 29 and 30 next year when Tembo is expected to continue to be grilled by the lawyers before a final witness from PHL testifies.

Illovo Sugar Malawi is also expected to parade its own witnesses.

The trial is expected to take months before its conclusion following long periods of adjournments.

Illovo Sugar is being accused by its minority shareholder Prudential Holdings Ltd (PHL) of presenting doctored financial statements to mask huge payments made to its parent company.

The trial under the Commercial Court in Blantyre was postponed six months ago and is being presided over by Justice John Katsala.

ISM is listed on the Malawi Stock Exchange; and its minority shareholder, PHL, is disputing a litany of payments ISM made to Illovo Sugar South Africa and also to its UK based parent company Associated British Foods (ABF).

Illovo is  largest sugar company in Africa, boasting agricultural and manufacturing operations in six southern African states including Malawi.  It employs thousands of people in those countries, “playing a significant economic role.”