Choppies Auditors Forced To Provide Ottapathu, Ismail Details
Mpho Mokwape | Tuesday November 30, 2021 06:00
The auditors, who are entangled in a P450 million lawsuit with the outfit’s bosses and shareholders, were last week ordered by High Court judge Boipuso Tshweneyagae to provide the pair with further particulars regarding the audit they have been requesting for better trial preparation.
According to the ruling, the auditors would have to provide the particulars of the audit they carried for Choppies despite constantly denying owing any legal duty to the outfit’s bosses.
The judge said the shareholders were within their rights to ask what information was not provided by the auditors to facilitate the audit.
“This is because the auditors themselves have introduced the issue of failure. It is not enough to merely state that Choppies failed to timeously produce quality information which they required as the auditors. You cannot run away from providing such information,” the judge said.
The judge explained that the information sought from the auditors was necessary to enable the Choppies bosses to plead and for the court to equally appreciate the issue of dispute.
She said it was important and must be provided to avoid the parties and the court being caught by surprise especially that the auditors were the ones who raised the issues of failure in their plea.
“The bosses were entitled to know with certainty from the auditors what if any was supposed to be the deadline for submission of the audit report. They were also entitled to know what documents were not produced timeously and which information was of poor quality,” she said.
The judge pointed out that it was because the claim against the loss of value of the shares of the bosses centred primarily on that therefore the request for further particulars could not be said to be unreasonable or sought as soliciting evidence to be used at trial.
The judge said from the audit agreement the parties had reciprocal obligations and that Choppies had a duty to provide the information.
“The auditors had an obligation to finalise the audit report within a reasonable time. One might also add that the auditors knowing that Choppies was a listed entity were aware of the timelines of the Botswana Stock Exchange.”
The auditors who are facing a P450 million lawsuit from the Choppies’ bosses, said they did not owe a legal duty or duty of care to the two shareholders in their individual capacities.
Meanwhile, the lawsuit is a result of the Choppies duo blaming the auditors for losing millions from the retail giant as shareholders. The two shareholders accuse the auditors of allegedly breaching their ethical, statutory and common law by “prioritising their own interest and entrenching their position in Choppies without regard to the best interest of the company and its shareholders”.
According to their court documents they blame the auditors for the alleged lapses that led to the regional grocer’s suspension from the stock exchange in 2018 and a collapse in value.
Ottapathu and Ismail claim PwC and its partner, Rudi Binedell breached the audit agreement they signed in 2018 and in the process made the shareholders lose millions.
The auditors on one hand are denying the allegations from Ottapathu and Ismail, saying the alleged loss was a diminution of the price of their shares in the company, which constituted a loss that was merely reflective of that of the company.