Auditor Kalanda testifies against Illovo Malawi over claims of fraudulent financial transactions

Independent accountant and auditor, Alexander Kalanda has testified against Illovo Sugar Malawi (ISM) in a case the country’s sole sugar producer is accused of fraudulent financial transactions.

Kalanda: Testified

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

Prudential Holdings Ltd, a minority shareholder in Illovo Sugar Malawi, on Monday paraded its third and last witness in a civil case against the premier sugar company.

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).

The trial was back in the Commercial Court in Blantyre on Monday and Tuesday with Kalanda testifying against ISM which is listed on the Malawi Stock Exchange.

In his cross-examination, ISM Senior Counsel Shabir Latif, quizzed Kalanda on why he failed to approach the company for information before making his in conclusions in a an audit report on behalf of PHL.

Kalanda was hired by PHL to review the ISM’s 2015 financial statement and gave his opinion faulting the accounts.

Asked by Latif why he was engaged by PHL to act as auditor of ISM, Kalanda argued that he was asked by his client to “review” the disputed audit, saying a review and an audit were the same terminologies.

Latif wondered why Kalanda did not use internationally accepted auditing routines to access accounting records, documents and estimates from ISM management in order to make his conclusions.

But the defiant Kalanda said it was “not necessary” as he used other forms of evidence provided by PHL to base his opinion.

He said it was not necessary to approach ISM directly as required by international audit standards because he had “enough evidence” from PHL.

The case is being presided over by Justice John Katsala who has since adjourned proceedings to May 21 and 22 this year.

Some of the witnesses PHL has so far paraded included Ramesh Savjani, chairman of PHL, and Gordon Tembo, senior partner at international auditing firm KPMG.

ISM, part of a grouping of Africa’s biggest sugar company operating in six countries, is yet to parade its witnesses to defend itself.

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John Kachapira
John Kachapira
4 years ago

Not surprised! This is as a result of a sleeping government. This multinational has siphoned millions of kwachas from Malawi, avoided paying tax, pay less for the pension fund of its employees and exploit Malawians both shareholders and it’s employees. Just Wait, you will hear that next week one of the Ministers will be at one of the estates dinning!!! Wake up and put the interest of the country beyond a bale of sugar. Check their procurement procedures. They buy most if not all items from a company in South Africa called east African companies. It is this company they… Read more »

4 years ago

These are the fertile grounds upon which corruption take roots – adjourning the case up to late MAY!!!! this is denying the country fair justice. such cases need conclusion within reasonable period

4 years ago
Reply to  Nsanje-Lalanje

This case provides a serious watershed point upon which MRA must change its rules and laws. What Illovo has done for a long time is repatriated profits in form of management fees and other uncalled for charges. These are the ones that should be taxed at 100% to avoid transfer pricing and profit remittance. Personally, I am just amazed about how ignorant Shabir Latif is on these matters. ILLOVO NEEDS TO BE PUNISHED AND RETROSPECTIVELY FOR THAT MATTER. Once this is done, the Government of Malawi with the assistance of MRA should also look at what other international companies are… Read more »

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