Tatu City defendants Stephen Jennings, Frances Holliday, Hans Jochum Horn, Frank Mosier and Christopher Baron have been found guilty of contempt by disobeying an order made in respect to an impending audit sanctioned by a court in Nairobi.
The foreign investors face civil jail terms and their properties may be attached for frustrating the court directive for the audit of offshore loans borrowed in the bitter-sweet multi billions shillings worth real estate development project.
“Courts do not make orders in vain…the orders they make, unless reviewed,raised or set aside must be obeyed,” justice Francis Tuiyot ruled adding that “the rationale for making an order for an in-depth Audit was well explained” to the defendants.
The disobedience of the orders of March 6 2015 and June 12 2015 in respect of the audit that was to be undertaken by PriceWaterHouse Coopers.
The order of March 6 2015 was to the effect that PwC or another agreed entity conduct independent in depth audit of the said offshore loan account and was to file their report in court within 45days of the start of the audit.
In support of the Notice of Motion for contempt Nahashon Ngige Nyaga (plaintiff) gave detailed evidence as to how the court orders in respect to the a audit were disobeyed or disregarded by the defendants, the judge ruled.
Scuttled start of audit
“Despite the making of the Orders aforesaid,the defendants, acting through Mr Robert James Reid. the person mandated by the defendants and directed by the court to liaise with the plaintiff(s)in the in depth audit,have completely frustrated and scuttled the commencement of the in-depth audit by intimidating
PwC with the result that the letter of Engagement has not been signed on account of the said intimidation and further evidence to be adduced,” Nyaga sworn affidavit read.
He attached correspondences that reveal an attempt by the rival parties and PwC to agree on the modalities of the audit that had been ordered by court.
Justicenow.co.ke will publish the full correspondence to Robert Reid in subsequent posts.
Reid had held himself out as having the mandate of Jennings Frances Holliday, Hans Jochum Horn, Frank Mosier and Christopher Baron, the court heard.
“Indeed in the Court order of June 12 2015 Mr Reid is identified as liaison person of the defendants, justice Tuyoit said adding “that to that extent the actions or non actions of Mr Reid cannot be overlooked.” the judge ruled.
The judge said there is now evidence that has not been controverted that Mr Reid did not respond to the concerns by PwC about the letter of Engagement,with the result that the letter of Engagement was not signed and the audit did not commence “as ordered and envisioned” by the court on March 6 2015 and June 12 2015 .
Further evidence of reluctance
Justice Tuiyot said that further evidence that there was reluctance by Mr Reid to cooperate with PwC is seen in what Stephen Jennings ,the first defendant said on September 16 2015 during the board of directors meeting of Tatu City limited and Kofinaf Company limited.
Details of Jennings utterances will be published in subsequent post.
“If the defendants had no confidence in the firm PwC Kenya then they should have sought the removal from the audit by way of a review of court orders…”the judge exclaimed.
He said that instead the foreigners stonewalled on the question of the Letter of Engagement and eventually on September 23 2105 PwC asked to be excused from the exercise and court granted the request.
Stopped in their tracks
In the matter before court I have found overwhelming and cogent proof that prior to the recusal of PwC, the defendants disobeyed and were in contempt of court orders…” the judge said.
He said the threshold of proof had been met.
The judge revisited the intrigues around September10 2015 when the defendants “mischievously” appointed the firm of Ahmednassir Abdikadir to take over and terminate the suit.
There was also an attempt to increase the quorum,the two of which have since “effectively been cured by court rulings” and the defendants stopped in their tracks.
“The need for an audit (may) still persist…if the order is to be implemented then another Audit firm must be appointed to undertake it…”said the judge.
And, the hypocritical mockers in feasts! But that’ s a story for another day.