Deloitte audit reports challenged as Chase Bank collapse case continues

Questions over the credibility and reliability of audit reports took centre stage in the ongoing trial of former Chase Bank officials after the defence mounted a robust challenge against a prosecution witness, securing key admissions on the findings of audit firm Deloitte.

During a lengthy cross-examination before the trial court, defence lawyer Cecil Miller questioned the witness, Mr. Allo, on Deloitte’s past audit work, regulatory record and the findings contained in reports relied upon by investigators in the case.

Miller directed the witness to previous investigations involving Deloitte’s audits of several institutions, including CMC Motors, Mumias Sugar and Dubai Bank. The witness acknowledged that the audit firm had faced investigations in relation to some of those matters.

The defence also questioned the witness on sanctions imposed by the Capital Markets Authority (CMA) against Deloitte over its audit of Chase Bank. Mr. Allo confirmed that the firm had been fined Ksh.10 million for failing to detect errors in financial statements that had been presented for audit.

Miller further challenged the witness on whether Deloitte’s conduct during the audit process contributed to the circumstances that led to Chase Bank’s collapse. The witness, however, rejected the suggestion and maintained that the firm’s actions did not cause the lender’s downfall.

Questions were also raised regarding a forensic audit conducted after Chase Bank was placed under receivership. The defence suggested that Deloitte’s involvement in both the audit and subsequent forensic review could have created a conflict of interest. However, the witness maintained that no conflict existed, explaining that separate Deloitte teams handled the respective assignments.

The most notable exchanges came when Miller turned to the contents of the audit reports relied upon by investigators in the criminal case.

Under questioning, the witness confirmed that Deloitte’s report did not conclude that the second accused, Dan Kang’a Buyu, conspired with any person to steal from Chase Bank. He further acknowledged that the report did not find that Buyu stole money from the bank and did not conclude that he engaged in money laundering.

The admissions are expected to form a central part of the defence case as the trial progresses, with the defence seeking to demonstrate that the audit findings relied upon by investigators did not directly attribute criminal conduct to the accused.

Miller also questioned the witness on the existence of approved and signed financial statements and challenged aspects of Deloitte’s conduct during the period leading up to the bank’s collapse.

The hearing was adjourned and is scheduled to continue on August 4, 5 and 11, 2026, when the court will receive further evidence in the long-running criminal proceedings involving the former bank executives.