Big Shame: EY and PwC Found Guilty of Fraud and Corruption in Kenya as World Bank Bans Lay Bare Scandal Inside the Global Audit Elite

KEY FACTS

EY Kenya  |  Debarment: 30 months from June 2024  |  Offences: Fraudulent practices, corrupt practices, concealment of conflict of interest, irregular allowances paid to project officials  |  Project: Somalia SCORE and PFM II programmes  |  Internal fallout: Laban Gathungu, senior partner, terminated; High Court awards him Sh43.12m for unlawful removal but orders him to repay EY Sh148m in related costs

PwC Kenya, PwC Rwanda, PwC Associates (Mauritius)  |  Debarment: 21 months from 17 March 2026, running to 16 December 2027  |  Offences: Collusive practices, fraudulent practices, misrepresentation of key experts, failure to disclose sub-consultants  |  Project: Eastern Electricity Highway Project, Ethiopia-Kenya, valued at Sh149.8 billion  |  Cross-debarment: AfDB, ADB, EBRD, IADB

For decades, the four giant accounting and advisory firms — Ernst & Young, PricewaterhouseCoopers, Deloitte and KPMG — have built their global empires on a singular, unassailable promise: that they are the guardians of financial probity in a world riddled with fraud. Corporates and governments have paid them hundreds of millions of dollars to audit their books, certify their accounts and keep the dishonest honest.

That promise lies in ruins in Kenya.

In a staggering sequence of admissions that has no parallel in the history of East African professional services, both Ernst & Young Kenya and PricewaterhouseCoopers Kenya have now confessed, under formal World Bank investigation, to the precise categories of misconduct their industry exists to combat. Bribery. Collusion. Fraudulent misrepresentation. The secret purchase of insider information from government officials. The Bank, which does not announce debarments lightly and investigates with the methodical thoroughness of a criminal court, has banned them both.

EY Kenya was the first to fall. On 26 June 2024, the World Bank Group announced a 30-month debarment against the Nairobi-based arm of the global firm, citing fraudulent and corrupt practices committed in the course of World Bank-funded programmes in Somalia. It was a sentence that would bar EY Kenya and any entity it controlled from all World Bank Group-financed operations for two and a half years, a punishment simultaneously extended to the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development and the Inter-American Development Bank Group under a 2010 mutual enforcement agreement.

EY Kenya had not yet completed nine months of that sentence when PwC was next.

On 18 March 2026, the World Bank Group announced the 21-month debarment, with conditional release, of PricewaterhouseCoopers Associates Africa Ltd, based in Mauritius, alongside PricewaterhouseCoopers Limited Kenya and PricewaterhouseCoopers Rwanda Limited.

The sanction relates to the Eastern Electricity Highway Project, the flagship Sh149.8 billion infrastructure initiative designed to construct more than a thousand kilometres of high-voltage transmission lines connecting a power substation at Wolayta-Sodo in Ethiopia to the Kenyan grid at Suswa, allowing Addis Ababa to export electricity to Nairobi while cutting power costs for Kenyan consumers.

The project was everything development finance is supposed to look like: a $1.26 billion multilateral collaboration between the World Bank, the governments of Kenya and Ethiopia, and the African Development Bank, conceived to reduce energy poverty and bind regional economies through shared infrastructure.

It was precisely the kind of high-value, high-visibility contract that the Big Four have fed on for generations, and precisely the kind that the World Bank scrutinises most ferociously.

“It suggests that something is broken in the profession.”

Kwame Owino, Chief Executive, Institute of Economic Affairs

What PwC and its African affiliates are accused of is not complexity. It is straightforward corruption of the most degrading variety.

According to the World Bank’s findings, the three PwC entities obtained confidential procurement information from Ethiopian project officials in 2019 and used that information to gain an improper advantage in the competition to win a consultancy contract for implementing International Financial Reporting Standards at the Ethiopian Electric Power Corporation.

Rival firms, including South Africa’s Aurecon, BDO Consulting, a joint venture between Argentina’s Levin and Estudios Energeticos, Grant Thornton Ethiopia and Australia’s RHAS, competed on the assumption that the process was clean. It was not.

The World Bank found that the PwC entities did not stop there. They sought further to steer the award of a second contract, for Fixed Asset Inventory and Revaluation for the Ethiopian Electric Utility, to PwC Associates.

During both the selection and execution phases of that contract, PwC Associates misrepresented the availability, qualifications and employment status of key experts it was putting forward for the work, and failed to disclose all sub-consultants it was deploying on the project.

The World Bank’s conclusion was unambiguous: this conduct constituted collusive and fraudulent practices under its Consultant Guidelines.

PwC has not issued a public statement on the ban. A firm that would, in ordinary circumstances, advise a corporate client to communicate early, clearly and with contrition in the face of reputational crisis, has chosen silence.

The EY Scandal: Bribery in the Horn of Africa

The EY Kenya case, adjudicated before PwC’s, is arguably the more lurid of the two. EY Kenya had been engaged as a consultant under the Somalia Core Economic Institutions and Opportunities Programme, known as SCORE, and under the Second Public Financial Management Capacity Strengthening Project, both World Bank programmes designed to rebuild Somalia’s public financial architecture after decades of conflict and state collapse. The programmes carried a weight of humanitarian purpose that made the betrayal all the more pronounced.

What the World Bank’s investigators found, after drilling through correspondence, financial records and the testimony of insiders, was a pattern of deliberate misconduct. EY Kenya failed to disclose a conflict of interest during the selection and implementation of four contracts under those programmes.

It involved an unauthorised agent in those contracts. And during the execution of at least one contract, EY Kenya made provision for allowances to be paid to project officials, a transaction the World Bank characterised, without equivocation, as bribery.

The man at the centre of it all was Laban Gathungu, a senior EY Kenya partner who led the firm’s operations in Somalia. Court papers filed in subsequent litigation in Nairobi reveal that Gathungu had secret and unethical communication with a Somali government official who provided him with confidential information about procurement discussions between the Intergovernmental Authority on Development and the African Development Bank, including intelligence on the proposed project price for the Drought Resilience and Sustainable Livelihoods programme.

That subcontractor, Horn Economic and Financial Institute, was later identified by forensic investigators as central to the alleged arrangement between Gathungu and the Somali official.

A whistleblower letter dated 10 March 2018 was sent to Gathungu while he was operating in Mogadishu. He did not escalate it. When the firm’s chief executive eventually confronted him in October 2018, Gathungu’s response was found unsatisfactory and his partnership was terminated immediately.

Gathungu then sued for wrongful removal, seeking Sh450 million in damages.

EY countersued. The High Court ruled that both sides had proven their respective claims, awarding Gathungu Sh43.12 million for procedurally unlawful removal while simultaneously allowing EY Kenya to recover Sh148 million from him, a sum comprising $1.053 million paid to EY India for a forensic review, ZAR850,000 paid to EY South Africa to investigate the fraud allegations, and Sh5.69 million in related costs.

The court’s refusal to award Gathungu the higher sum he sought, citing his own questionable behaviour, encapsulated the moral wreckage of the entire affair: a firm that polices the conduct of others, policed by the very courts to which it sells its governance expertise.

The Regulator’s Silence is Deafening

The Institute of Certified Public Accountants of Kenya, which regulates all players in the Kenyan accountancy and audit industry and which wields the power to suspend or revoke practising certificates, has not publicly responded to either the EY Kenya or the PwC debarments.

It did not respond to queries from the press following the EY ban in 2024. It did not respond after the PwC announcement in March 2026. Its silence, in the face of the two most damaging regulatory events in the history of Kenyan professional services, has itself become a story.

Kwame Owino, chief executive of the Institute of Economic Affairs, says the debarments expose a structural failure that extends well beyond the firms themselves. He argues that after every World Bank ban, ICPAK should have taken visible, deterrent action to signal that the conduct was unacceptable under Kenyan professional standards, and that the absence of such action has contributed to a permissive environment in which firms calculated that the risk of exposure was manageable.

Owino is not entirely without sympathy for the commercial pressures these firms face in markets where corruption is deeply entrenched, where government officials with information of financial value sell it as a matter of routine, and where firms that decline to play the game may simply find that their competitors do not share their scruples. But his sympathy stops well short of absolution.

He notes that the World Bank is not an institution that is easily fooled, pointing out that the development lender typically deploys outside investigators to scrutinise its projects with exceptional rigour, and that anyone who decided to commit misconduct on a World Bank contract was not making a calculated bet so much as registering an eventual certainty of being caught.

That EY Kenya and PwC proceeded regardless, he says, is among the most disturbing aspects of the entire scandal.

A Global Giant Drowning in Scandal

The Kenya PwC debarment arrives at a moment of profound institutional crisis for the global firm. Mohamed Kande, who became PwC’s global chair in July 2024, the first Black professional to hold the role and the first from a consulting rather than audit background, inherited a firm already on fire across multiple continents.

In China, PwC’s auditing business was suspended for six months and fined $62 million by regulators who found that it had concealed or condoned fraud at the collapsed property developer Evergrande, which had accumulated more than $300 billion in debt before its spectacular implosion. Chinese state-owned enterprises departed the firm in a cascade.

In Australia, a senior tax partner was found to have passed confidential government information to colleagues to help them win business from multinational technology companies, triggering a political furore and forcing PwC to sell its government consulting division entirely.

In Saudi Arabia, the Public Investment Fund, the $925 billion sovereign wealth fund, severed its advisory relationship with the firm. By April 2025, PwC had shut down operations across more than a dozen African countries, including nine it exited simultaneously in a single announcement, as the firm scrambled to contain risk and distance itself from markets it could no longer guarantee it could police.

Kenya, conspicuously, was not on that list of exits. Within months of that African retreat, PwC Kenya’s Africa affiliates stood accused before the World Bank.

Kande has spoken publicly about rebuilding trust in the firm’s operations. The settlement that ended the World Bank’s Kenya investigation is, in one sense, a testament to his strategy: admit, cooperate, remediate, and accept a reduced sentence.

PwC Associates, PwC Kenya and PwC Rwanda pleaded guilty in exchange for 21 months rather than the longer sanction that would otherwise have applied. The ban took effect on 17 March 2026 and will run until 16 December 2027 unless the firms satisfy the World Bank’s conditions for early release.

PricewaterhouseCoopers Africa Limited, the continental coordination entity that sits above the national member firms and is responsible for compliance oversight across the network, was required to sign the settlement agreement as a non-sanctioned party. The World Bank’s insistence on that signature is itself a pointed commentary: the failure in Kenya was not an isolated deviation by a rogue unit but a failure of oversight at the continental level.

Half the Big Four, Half the Industry, All of the Shame

Kenya ranks second among African nations whose involvement in African Development Bank-financed projects has attracted multilateral sanctions, a grim statistic that speaks to the depth of the procurement corruption problem in the country’s public contracting ecosystem.

The Big Four, with their air of unimpeachable rectitude and their global brand equity, are supposed to be the corrective force in that ecosystem. Instead, the evidence now before the World Bank shows they were participants in it.

The commercial consequences are already visible. Both EY Kenya and the PwC affiliates face mandatory exits from the personnel involved in the misconduct, the forced termination of relationships with implicated sub-consultants and the obligation to construct from scratch integrity compliance programmes that satisfy the World Bank’s Integrity Vice Presidency.

They must submit to monitoring. They must train staff. They must demonstrate, to the satisfaction of an institution that was deceived by their own employees, that they have reformed.

The question that neither firm has answered publicly, and that ICPAK has declined even to acknowledge, is the one that now confronts the entire East African professional services industry: if the firms that are paid to certify integrity do not have any themselves, who is left to certify them?