How To Avoid Collapses Like Imperial Bank & Uchumi
By Donald Kip
The collapse of Imperial Bank and imminent collapse of Uchumi could have been avoided if we learnt past lessons. In 1990’s, a company called Enron Corporation grew from zero to the 7th biggest company in the world in less than 10 years. When it imploded in 2004, it was found that its accounts had been manipulated by the top management with the connivance of its auditors, Arthur Andersen, then a global auditing giant, and the company’s lawyers. The company collapsed, the auditors folded up and many law firms involved closed. Those culpable went to jail and paid fines of hundreds of millions of dollars.
Back home, if a company is listed at NSE and later found that its books are cooked, the company’s management, Board, auditors and their lawyers ought to be held accountable, indicted and made to refund for all losses and shareholders investment. CMA should also blacklist all transaction advisers of a company that collapses within three years of listing.
It is only when professional accountability is called that companies in Kenya will never cook their accounts again. It is sad that we have seen or seeing the collapse of Imperial Bank, Kenya Airways, Transcentury Group, Uchumi et al yet they got and are listed at Nairobi Stock Exchange.
Here is how one Phil Wesonga captured the shocking revelations that Uchumi cooked its Financial Statements>>>
They will tell you Homa Bay born Evans Kidero is incompetent, that he bribed a supreme court judge and that cannot manage garbage collection in Nairobi. They will trend silly hashtags and raise opinion count questions for that on prime time news. But they wont tell you Murang’a born Jonathan Ciano led a systematic looting of Uchumi Supermarkets going as a far as falsifying financial statements to hide embezzlement of upwards of Sh1 billion. Before Ciano came along, Uchumi had created other multi-billionaires who share genes with Ciano and are today flaunting their ill gotten wealth at the NSE.