So a bank is closed and people want to investigate. They rack their brains back and forth coz you see they want to be professional and above board. Who do they call in, the people with the reputation - PriceWaterhouseCoopers.

Okay with all due respect to the professionals and forgiving my ignorance, I actually think these consultant profession leaves a lot to be desired. They are paid for their work regardless of the outcome and when push comes to shove, they will never commit...



See what Warren Buffet said about consultants:
...imagine for a moment that all American corporations
are, and always will be, owned by a single family. We’ll call them the Gotrocks. After paying taxes on dividends, this family – generation after generation – becomes richer by the aggregate amount earned by its companies. Today that amount is about $700 billion annually. Naturally, the family spends some of these
dollars. But the portion it saves steadily compounds for its benefit. In the Gotrocks household everyone grows wealthier at the same pace, and all is harmonious.

But let’s now assume that a few fast-talking Helpers approach the family and persuade each of its members to try to outsmart his relatives by buying certain of their holdings and selling them certain others. The Helpers – for a fee, of course – obligingly agree to handle these transactions. The Gotrocks still own
all of corporate America; the trades just rearrange who owns what. So the family’s annual gain in wealth diminishes, equaling the earnings of American business minus commissions paid. The more that family members trade, the smaller their share of the pie and the larger the slice received by the Helpers. This fact is not lost upon these broker-Helpers: Activity is their friend and, in a wide variety of ways, they urge it on.

After a while, most of the family members realize that they are not doing so well at this new “beatmy-brother” game. Enter another set of Helpers. These newcomers explain to each member of the Gotrocks clan that by himself he’ll never outsmart the rest of the family. The suggested cure: “Hire a manager – yes, us – and get the job done professionally.” These manager-Helpers continue to use the broker-Helpers to execute trades; the managers may even increase their activity so as to permit the brokers to prosper still more. Overall, a bigger slice of the pie now goes to the two classes of Helpers.

The family’s disappointment grows. Each of its members is now employing professionals. Yet overall, the group’s finances have taken a turn for the worse. The solution? More help, of course.

It arrives in the form of financial planners and institutional consultants, who weigh in to advise the Gotrocks on selecting manager-Helpers. The befuddled family welcomes this assistance. By now its members know they can pick neither the right stocks nor the right stock-pickers. Why, one might ask, should they expect success in picking the right consultant? But this question does not occur to the Gotrocks, and the consultant-Helpers certainly don’t suggest it to them.

The Gotrocks, now supporting three classes of expensive Helpers, find that their results get worse, and they sink into despair. But just as hope seems lost, a fourth group – we’ll call them the hyper-Helpers – appears. These friendly folk explain to the Gotrocks that their unsatisfactory results are occurring
because the existing Helpers – brokers, managers, consultants – are not sufficiently motivated and are simply going through the motions. “What,” the new Helpers ask, “can you expect from such a bunch of zombies?”

The new arrivals offer a breathtakingly simple solution: Pay more money. Brimming with selfconfidence,the hyper-Helpers assert that huge contingent payments – in addition to stiff fixed fees – are what each family member must fork over in order to really outmaneuver his relatives. The more observant members of the family see that some of the hyper-Helpers are really just manager-Helpers wearing new uniforms, bearing sewn-on sexy names like HEDGE FUND or PRIVATE EQUITY. The new Helpers, however, assure the Gotrocks that this change of clothing is all-important, bestowing on its wearers magical powers similar to those acquired by mild-mannered Clark Kent when he changed into his Superman costume. Calmed by this explanation, the family decides to pay up.

And that’s where we are today: A record portion of the earnings that would go in their entirety to owners – if they all just stayed in their rocking chairs – is now going to a swelling army of Helpers. Particularly expensive is the recent pandemic of profit arrangements under which Helpers receive large portions of the winnings when they are smart or lucky, and leave family members with all of the losses – and large fixed fees to boot – when the Helpers are dumb or unlucky (or occasionally crooked).

Kweli @msotoville... On that note, just today morning, I saw that cousin of Kirubi, formerly from PWC, of Uchumi's past - Kennedy Thairu.

I remembered how the 'staid and unsophisticated' Titus Mugo, chosen successor by Suresh Shah, who had been with Uchumi for 18yrs was shown the door. Suresh Shah should not have allowed a company with 500m in cash assets and 1.2b in gross profits end up in the hands of consultants!

Excerpt, Feb 2003:
You have to give one thing to the former Uchumi CEO Kennedy Thairu; he was always upbeat, even in the face of adversity.

And he strongly believed in his strategy, or as some would love to put it, lack of the same.

"It could not be worse. We have bottomed out. Uchumi has hit a point of inflexion. We can only go one way, and that is up," he would say with palpable zeal.

@mozenrat agreed. But PWC were commissioned by Central Bank to investigate the bank. PWC had nothing flattering to say "minimal cooperation", "systematic wrong doing", "abetting of tax evasion", "no KYC", "exceeding single borrower limits and insider lending" etc...

But when asked in 'court' (Hse Committee) whether on weighing all the evidence given, in their expert opinion, the 'suspect' (bank) should be indicted for the crime, they plead terms of reference! Perhaps a committal forensic investigator should have got the job.


Michael Joseph quip:
I do consult when I'm not sure of the answer, but in the end I make the decision. But I consult internally, I don't consult externally.

I don't believe, sorry to say, in consultants giving me answers to the questions because my experience of consultants is they've no responsibility for the answers. They tell you what to do and when if it's wrong they say YOU did it wrong.