Chaos erupts at firm's AGM over Sh100 million carbon credits

Chaos erupted during the Kasigau Ranching Company Annual General Meeting (AGM) after shareholders clashed with the board of directors over how millions of shillings were spent.

At the charged meeting characterised by heavy police presence, the more than 3,750 shareholders disapproved of company auditor and secretary reports terming them biased and inappropriate.

Kasigau Officer Commanding Station Benard Otomei and his officers kept vigil as shareholders and directors traded accusations over the expenditure of funds at the ranch, which they claimed was facing a financial and management crisis.

The shareholders refused to approve the financial statements and kicked out officials of the company’s audit firm and company secretary Victor Were saying their reports did not represent the true state of affairs of the ranch.

Besides disowning the two reports, the shareholders asked the county government to appoint an independent forensic auditor to investigate how over Sh100 million disbursed by Wildlife Works through Kasigua reducing emissions from deforestation and forest degradation (REDD project) as carbon credit payouts last year was spent.

“We have today resolved to disapprove the auditor and company secretary reports and the two offices cease to represent our company interests. The two offices are biased and protect the interests of the directors. They do not represent the true state of affairs of the company that is facing management and financial crisis. We will appoint new ones to represent our interests and all the nine directors should go home,” Gibson Dodi, a shareholder told the County Chief Officer Stephen Mcharo who attended the meeting.

Leonard Mwachia, a shareholder said: “We have no faith in the auditor and the company secretary and they should all go home as they are not surviving our interests. We cannot adopt the audit report because we have been supplied with the financial statements at the AGM." 

Mcharo called for a forensic audit of the ranch to determine its true financial position. “It is important to have an independent forensic audit,” he said.

The shareholders said that the directors have been traveling a lot instead of working to ensure the financial stability of the ranch.

During the AGM, the ranch chairperson Jonathan Mwangeje and the directors were hard-pressed to explain how they spent millions of shillings on administrative purposes and projects.

According to the audit report seen by The Standard, more than Sh24.9 million was spent on administrative expenses like directors' travel costs, subsistence and sitting allowances, meals and refreshments, seminar expenses, consultancy fees and capacity building among other extravagant expenses.

Ambale Ogot and Company LLP, the ranch auditor, however, defended their report saying they exercise professional judgment and always maintain professional work throughout the audit.

“We also identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion,” he told the shareholders.

The auditor said the information given in the report of the directors is consistent with the financial statements.

The audit firm however said the ranch directors are responsible for the preparation and fair representation of the financial statements that give a true and fair view in line with international financial reporting standards.

The firm further said that the audit report meets the requirements of the Kenyan Companies Act, 2015, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

“In our opinion, the accompanying financial statements give a true and fair view of the state of affairs of the company as of December 31, 2023, and of its financial performance and cash inflows for the year ended in line with international financial reporting standards and Kenyan Companies Act, 2015,” states the audit firm report.

Two directors, Allen Mwakesi and John Mwanjala differed with the auditor saying there was a crisis in the management of the ranch.

The two directors advised the shareholders to decide the destiny of the ranch by electing accountable and transparent ranch leadership.

“The implementation of the Sh19 million Eco Lodge that has since stalled is a wrong investment,” said Mwakesi, who is a banker.