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.

Gordon Tembo: audited Illovo Sugar Malawi’s accounts were misleading.

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.”

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Guest

Eastern Produce of Malawi (EPM), a company that grows and processes tea in Mulanje and Thyolo MUST be externally audited too. Malawi could be loosing revenue from EPM too. The company buys too much from abroad just to give their foreign friends business.

Charlie Hebdo
Guest

For once it’s not money stolen frm government. Very rare indeed!! Let’s see a mbhuno locked up because of this corruption..but in Malawi, he will buy his freedom

Kheme
Guest

I was hoping to hear that Malawi government is an interested party in this case because a lot of forex was dubiously externalised.

mseuwaboma
Guest

Forex as well as Corporate Tax. Most of the transferred funds would have been deducted as (illegal) expenses , thereby reducing taxable profits. MRA should have been involved in this case. For the record all the big foreign owned companies in Malawi evade corporate taxes in this manner. Having worked in the tobacco sector, Tom Malata of MRA should know how the fake expenses are “generated”. It has been going on for years, aided by the big audit firms…

Boss Zonke
Guest

Shaa! at the helm of finance of Illovo Malawi is a former Deloitte audit partner, Mr Katandula a very knowledgeable and brilliant mind, I hope this does not tarnish his career.

Yankho
Guest

This happened before he changed jobs, nsanje lekani bwana

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