Deloitte & Touche is set to replace KPMG Kenya as the external auditor of Kenya Airways
, which is working on a turnaround plan.
The national carrier will ask shareholders to ratify the proposed appointment of Deloitte at its annual general meeting on September 22.
“To resolve that Deloitte & Touche be appointed auditors of the company to hold office until the conclusion of the next annual general meeting and that their remuneration be fixed by the directors,” reads one the meeting’s agenda.
Deloitte’s appointment comes after the consultancy firm was hired by KQ, as the airline is known by its international code, to conduct a forensic audit of the company.
The audit unearthed incidences of fraud perpetrated by staff and external parties, costing the company millions of shillings.
This saw the carrier sack some of the employees implicated in the underhand dealings.
Most of the companies that have been hit by major cases of fraud have changed their external auditors, sometimes at the urging of the Capital Markets Authority.
All the big four audit firms –PricewaterhouseCoopers (PwC), EY, KPMG and Deloitte— have at various times handled accounts of publicly traded firms whose managements were later found to have presided over major fraud.
KQ’s fraud, coupled with a debt-fuelled expansion spree pulled the airline into losses and wiped out shareholder wealth. This has seen the carrier embark on a turnaround plan featuring major dilution of existing shareholders and forcing banks to convert their loans into shares of the company.
Credit: Business Daily