The trial of former Chase Bank executives took a significant turn after the defence secured a series of admissions from a prosecution witness, including confirmation that a forensic audit relied upon by investigators did not conclude that one of the accused had stolen money, conspired to defraud the bank, or engaged in money laundering.
During a rigorous cross-examination, led by lawyer Cecil Miller, before the trial court, prosecution witness Fredrick Aloo, an auditor, acknowledged that Deloitte's forensic report did not directly implicate the second accused, Dan Kang'a Buyu, in the offences facing the former bank officials.
"The report did not conclude that Dan Kang'a Buyu conspired with anyone to steal from Chase Bank," Aloo admitted under questioning by Miller.
The witness further conceded that the report did not find that Buyu had stolen funds from the bank or engaged in money laundering.
"The report does not state that he stole money from the bank, nor does it conclude that he was involved in money laundering," Aloo told the court.
The admissions are expected to form a central plank of the defence case as lawyers seek to challenge the evidentiary basis of the prosecution's allegations against the former executives.
Miller also turned his attention to Deloitte's track record, questioning the witness on past regulatory and professional scrutiny involving the audit firm.
Referring to investigations linked to high-profile corporate failures and financial scandals, including CMC Motors, Mumias Sugar and Dubai Bank, Miller asked whether Deloitte had previously faced regulatory investigations over its audit work.
Aloo acknowledged that the firm had indeed been investigated in relation to some of those matters.
The defence lawyer further questioned the witness about sanctions imposed by the Capital Markets Authority (CMA) following Deloitte's audit of Chase Bank.
Aloo admitted that Deloitte was fined Sh10 million by the regulator after failing to detect errors contained in financial statements that had been presented for audit.
"The firm was fined Sh10 million for failure to detect errors in the financial statements," the witness confirmed.
Miller sought to suggest that Deloitte's audit failures may have contributed to the circumstances surrounding Chase Bank's eventual collapse. However, Aloo rejected that assertion.
The defence also questioned Deloitte's role in conducting a forensic audit after the bank had been placed under receivership, raising concerns about a possible conflict of interest. The witness maintained that no conflict existed because separate Deloitte teams handled the audit and forensic assignments.
In addition, Miller challenged the witness on the existence of approved and signed financial statements and probed Deloitte's conduct in the period leading up to the lender's collapse.
The long-running trial continues on August 4, 5 and 11, 2026, when the court is expected to hear further evidence in the case against the former Chase Bank officials.
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