NAIROBI, Kenya, Mar 7 – The Capital Markets Authority is set to probe audit firm Ernst and Young in relation to audit of troubled Uchumi Supermarkets after the high court dismissed the application filed by EY barring investigation.
Judge George Mativo says EY moved to court too early acting on apprehension.
The judge says that Capital Markets Authority acted in pursuant to the law and no breach of fundamental right had taken place.
EY sought orders barring CMA from summoning it as part of the investigations into the Uchumi Supermarket.
The Auditors have been accused of cooking books at Uchumi supermarket leading to losses of Sh1 billion shilling at the retailer.
CMA’s has issued a notice to the audit firm dated August 31 and signed by chief executive Paul Muthaura requiring Ernst and Young to respond to allegations of misconduct by September 24, 2016.
EY sought the court to stop CMA from being the Investigator, prosecutor and hangman in the issue.
However, according to the Judge, CMA has not shown any indication that it will act in this manner.
“The fear of the first respondent being the investigator prosecutor and hangman many be real, but the process was at the initial stage and in view of the foregoing section, it cannot be said with certainty that the first responded was going to perform the same role. Further, there is nothing preventing a person under investigation to ask for this section to be invoked,” Judge Mativo said.