The Kenya Capital Markets Authority imposed a KES 10 million penalty on EY for its role as external auditor and reporting accountant for Uchumi Supermarkets Ltd.’s 2014 rights issue. The action follows findings of serious misrepresentations in financial statements included in the issue’s information memorandum and EY’s failure to ensure adequate and accurate disclosure of material facts in Uchumi’s 2014 annual report and financial statements. EY must also provide three years of remedial training to employees involved in auditing issuers, Nairobi Securities Exchange listed companies and the authority’s licensees. Another EY member firm must supervise the training, with reports submitted to the authority and the Institute of Certified Public Accountants of Kenya. Failure to comply could result in EY being barred from providing professional services to those entities. The authority also recommended disciplinary action by the institute against EY and engagement audit partners Michael Kimoni and Joseph Cheborbor. The determination follows administrative proceedings that began in 2016 and resumed after the High Court upheld the authority’s enforcement mandate in 2017 and the Court of Appeal dismissed EY’s appeal in 2022.

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