Audit company; Klynveld Peat Marwick Goerdeler (more commonly known as KPMG) has been ordered by the High Court to pay its former boss; Richard Boro Ndung’u a whooping 379.03 million Kenyan Shillings or his unlawful sack back in 2017.
Justice Francis Tuiyott sustained or rather validated the decision of an arbitrator, ruling in favour of the 379.03 million Kenyan Shillings sum being granted to Richard Boro Ndung’u and stating that his compulsory retirement was indeed unlawful.
The current sum of 379.03 million Kenyan Shillings is however significantly lower than the 504.8 million Kenyan Shillings sim (subject to exchange rates) which was granted to Richard Boro Ndung’u in 2018 by arbitrator; John Ohaga. The decision by the arbitrator, was what led to KPMG looking for a rectification in the High Court.
The Judge; Justice Francis Tuiyott said, “I find and hold that the claimant has suffered loss and damage as a result of the conduct of the respondents towards him since the commencement of investigations against him from October 3, 2016 culminating in his purported compulsory retirement on January 13,2017 and the announcement.”
Justice Francis Tuiyott slashed the initial figure down by 35.5 million Kenyan Shillings as a result of the profit which was first given to Richard Boro Ndung’u by John Ohaga who was the arbitrator.
Justice Francis Tuiyott also dropped the special damages by 661,430 Kenyan Shillings and aggravated damages by 2.7 million Kenyan Shillings. He stated that while Mr. Richard Boro Ndung’u did not issue a formal notice indicating his intention to retire on the 31st of August 2019, he had however implied that intention in at least two association meetings.
Justice Francis Tuiyott revealed that Mr. Richard Boro Ndung’u made it known that he would no longer be a partner after August of 2019. As a result compensating the former boss for the period of time after, would basically be granting him a profit.
In the words of the Judge, “To therefore award him damages for a period beyond that would be to put him in a better position than he would have been had he retired on August 31, 2019 as he had unequivocally stated.” He went further to cut down additional damages by 86.8 million Kenyan Shillings.
The back and forth between Richard Boro Ndung’u and his former employer; KPMG (Klynveld Peat Marwick Goerdeler), first began on Monday the 3rd of October 2016 when he was summoned by the Chief Executive Officer (CEO) of the time; Josphat Mwaura to ABC Place, Westlands.
According to court documents the summoning was as a result of an allegation which had been made against Mr. Richard Boro Ndung’u by an anonymous individual who claimed that he was having an inappropriate relationship with his personal assistant.
In an attempt to help with investigations, Mr. Richard Boro Ndung’u was asked to hand in his laptop and phone.
He was also made to vacate his office for a period of two (2) days while the investigations were conducted. According to Mr. Richard Boro Ndung’u although he believed that it was unlawful for the then Chief Executive Officer (CEO); Josphat Mwaura to confiscate his devices, he however opted to not put up a fight and cooperate.
The incident in turn led to a number of events which eventually resulted in Richard Boro Ndung’u losing his job at KPMG (Klynveld Peat Marwick Goerdeler).
Mr. Richard Boro Ndung’u proceeded to court after he was fired, and demanded 8.2 million dollars which was the sum of damages, as well as his projected earnings from 2017 to 2024 when he would have attained the legal retirement age of 60.
Richard Boro Ndung’u also accused KPMG of intimidation, non-procedural removal from the KPMG – East Africa partnership, and targeting him unfairly.
The High Court subsequently instructed that the matter be heard by an arbitrator.
After the arbitration proceedings were concluded the arbitrator; Mr. John Ohaga on the 6th of March 2019 awarded Richard Boro Ndung’u a sum of 460.5 million Kenyan Shillings (based on the exchange rates in effect at the time) and an additional 1.9 million Kenyan Shillings in special damages.
The Arbitrator also made it known that the sum will also incur an interest of 5 percent every year, until the audit company; KPMG paid the entire amount.
After the decision by the arbitrator, KPMG (Klynveld Peat Marwick Goerdeler) however opted to file a case in the High Court.
Justice Francis Tuiyott during his judgement said, “KPMG chose the meeting of Association of December 16, 2016 as the forum in which the removal of RBN [Mr Ndung’u] would be considered but as the tribunal found (and which is upheld by this court) the meeting was not properly convened in respect to that agenda. It cannot be said that there was ever a proper or indeed any consideration to exit RBN.”
Justice Francis Tuiyott added that Mr. Richard Boro Ndung’u should have been issued a notice to prepare his responses because although the investigation may have been classified as informal at the time, it was detailed and included forensic examination and mapping of his laptop and mobile device(s).
According to the Judge, “As a matter of good faith, it seems fair that RBN should have been given prior notice of these serious allegations to enable him prepare his answer to them.”
KPMG (Klynveld Peat Marwick Goerdeler) was not comfortable with the final verdict of Justice Francis Tuiyott and has been given the go ahead to take the case to the Court of Appeal.
In Justice Francis Tuiyott’s words, “As a consequence, the Appellants who have signalled their intention to appeal this court’s decision will have to move the Court of Appeal under Section 39(3) (b) of the Act.”
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