KPMG draft report on Safaricom is a storm in a tea cup

“Governments can do a lot to improve whistle-blower protections and we can all act to celebrate and protect whistle-blowers”, reads Bob Collymore’s statement on the need to protect and defend those who stand up against corruption. These same words will come under scrutiny when he appears before the National Assembly’s Finance committee to explain the corruption contained in the KPMG draft report.

The person who leaked the draft report first to the Speaker in a petition and later to bloggers can be considered a whistle blower. A Transparency International Kenya 2015 Policy Brief records that the lack of a comprehensive legal safeguard for whistle-blowers presents a potential weakness in the country’s fight against corruption. This is because systematic victimization of whistle-blowers has contributed to a ‘culture of silence’ in both public institutions and private sector organisations.

This culture of silence is what pundits have argued has led to entrenched corruption and corrupt practices in the private sector especially those with huge advertising budgets like Safaricom. For public officers, The Public Officer Ethics Act, 2003 seems to ironically penalize whistle blowers while at the same time promote ethical practices.

The Act says a person who, without lawful excuse, divulges information acquired in the course of acting under the Act is guilty of an offence and is liable, on conviction, to a fine not exceeding five million shillings or to imprisonment for a term not exceeding five years or to both.

In this case, the person released a draft report. But as to whether the draft report can be used to gauge and determine someone’s unethical deeds both consciously and unconsciously is a matter of time. For now, perception is saying they should.

Legal backing

A recent case also involving KPMG gives fodder to the debate.

Nairobi Governor Dr. Evans Kidero sued the Standard Group, its journalist Paul Wafula, Daniel Wesangula, Nation Media Group and Remenya Gibendi for defamation. The media houses and respective journalists and editors published draft KPMG report on Mumias Sugar Company (MSC) that cast the Governor in bad light.

Through Lawyer Prof. Tom Ojienda, Kidero said the stories depicted him as ‘anarchist, a delinquent, fraudster, that he lacked integrity, a fraudster, a swindler, a scofflaw, that he is corrupt and is a white collar criminal undeserving of holding public office’. These same words implicitly describe Bob Collymore, going by blogs writings on him, especially on the KPMG draft report.

In his ruling on awarding an injunction to the Governor against the newspapers for further publishing contents of the report, Justice Antony Mabeya made reference to a number of issues that are a replica of the Safaricom case. The Judge delivered the injunction on 21st day of September, 2015.

First, he said these matters need to balance between the constitutional right to freedom of expression with the individual right to reputation. He contended that, that freedom is limited with respect to the rights and reputation of others.

Secondly is the incompleteness of a draft report. The Judge alluded to KPMG writing to the Parliamentary Committee on Agriculture that the report was only a draft and a final report would be released upon receipt of certain comments from MSC by KPMG.

Thirdly is the issue of private and confidentiality of the report. The Judge noted that report contained the following words;

This report was prepared solely for the purposes of reporting our findings to you. This report should therefore not be utilized for any other purpose. No part may be quoted, referred to or disclosed in whole or in part, by any party, without our prior consent.”

For the KPMG report to Safaricom, the report was solely meant for two people in the company; CEO Bob Collymore and Project Management Organizations head, Irene Miru who assists the CEO in the delivery of his duties. What is is that while the Nation and Standard journalists failed to interview KPMG before publishing the serialized stories, some bloggers have also failed to interview KPMG and also Safaricom to get their comments.

The Judge further said

In preparing this report, KPMG has relied upon and assumed, without independent verification, the accuracy and completeness of any information provided to, and/or gathered by KPMG whether from public sources or otherwise and accordingly KPMG express no opinion and makes no representation concerning the accuracy and completeness of any such information contained in this report, .

Our report contains elements that have been identified as part of our investigation, but these elements are not exhaustive. Any documents or information brought to our attention subsequent to the date of this report  which would affect the findings listed below, will require our findings to be adjusted and qualified accordingly.”

This section speaks to a draft report being handed back to the organization being audited, to verify the issues raised with solid explanations and attach documents to either retain their findings or qualify them.

Fourthly, KPMG declined to vouch for the MSC report. They explained, as the above disclaimer notes, that it had limitations primarily the lack of right of reply without which the report was only a draft and not conclusive.

Fifth, the judge spoke to the failure of the the newspaper to not only state it was a draft report, but also fail to give the disclaimer about it being an inconclusive document. In the case of Safaricom report, while most journalists and bloggers have agreed and written that the report is draft, none has raised the disclaimer, which is mandatory in any such report.

Sixthly, the judge delved into the implication of the published stories on reputation. He said

Once reputation is lost the same cannot be regained. What a man has, in my view, is his reputation and that is why the framers of the constitution were very alive to that fact that they put it as a proviso to the freedom of expression in Article 33.

Media stories like one by Business Daily list the specific individuals, companies and dealings that raise concerns about the integrity of Safaricom and some of its staff. Without seeing the final version of the report (which Bob said he will not make public because it is potentially litigous), it cannot be confirmed whether the individuals in the draft report failed to satisfy the auditors or not. Perhaps time will tell if and when the individuals grossly named are fired in the coming weeks and months.

Lawyer Ken Ashimosi explained that it is difficult to use a draft report against someone in any court of law or legal process that is above board. You could find that the issues raised in the draft report were exhaustively answered in the responses to the auditors before the final report was finalized. But this also brings to the fore the issue of ethics. Ethical procedures in getting evidence is equally critical when collecting and collating evidence.

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