Corporates News

KTDA avers that issued high court audit order is illegal

KTDA Chief Executive Officer Lerionka Tiampati at a past press conference

The Kenya Tea Development Agency (KTDA) has applied to have the audit orders issued by a Murang’a High court vacated.

The KTDA argue that the Auditor -General has no legal mandate to audit the agency because it is a limited company and pursuant to Section 717(1) of the Companies Act, the agency had the mandate to appoint an auditor of their choice.

Murang’a County government had filed a petition seeking to have KTDA 2019 accounts audited following reduced tea earnings.

Through lawyer Mwangi Kibicho, the agency accused Murang’a county government of political play and abusing the court process. The agency avers that the office of the Auditor-General is an independent office mandated to audit and report on the accounts of state organs, public entities and entities funded using public funds.

“The Auditor-General is a holder of public and an independent office. Pursuant to the provisions of Article 249(2)(b) of the constitution, it is not subject to control or direction by any person or authority. The respondent is a limited liability company and the Auditor-General has no legal mandate to audit the respondent,” the lawyer averred.

The agency also wants the court to consolidate the suit with a 2014 petition that is before the Kericho High Court where the Murang’a County government is listed as an interested party.

They further filed an application for a 3 bench judge to determine the matter owing to its gravity and seriousness.

“The gravity and peculiarity of the issues in both the petitions necessitate that it be dispensed with by an uneven number of judges being not less than three assigned by the chief justice as articulated under Article 165(4) of the constitution,”read part of the application.

The Kericho High Court petition was sponsored by Kericho County governor, Paul Chepkwony. He is seeking compensation for over 400,000 smallholder tea farmers in the western rift for alleged exploitation by major players in the tea sector.

In the suit, the governor wants the court to compel KTDA to return Ksh. 87 billion to farmers in the western rift for allegedly charging them twice for management services while also accusing the agency of mismanaging the tea sector.

In a quick rejoinder, Murang’a couty governor, Mwangi Wa Iria who was the sponsor of the audit suit said that farmers are also seeking to be enjoined in the matter. He also opposed the application to transfer the matter to Nairobi.

“Why does KTDA object to be audited? Why do they want the case transferred to Nairobi? We shall ask these hard questions as farmers prepare to file an application to be enjoined in the matter,”stated the county governor.

Last week Murang’a county assembly also declared an intention to be enjoined in the petition.

High Court judge Hon. Kanyi Kimondo directed that the fourth application by KTDA to determine if the matter can be referred to the Chief Justice will be heard first as it was tied to the rest of the applications hearing and determination.

The case will continue on November 29, 2019 when an inter-party hearing will be held.

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