Seth Onyango @SethManex
Former National Bank of Kenya (NBK) chief executive Munir Sheikh, who was alleged to have been involved in an accounting fraud, has moved to court seeking Sh454 million for wrongful dismissal.
He now demands reinstatement to his position, payment of his statutory entitlements, terminal dues and salary for the remainder of his term.
In an affidavit filed at the Employment and Labour Relations Court on October 26, Sheikh seeks compensation of Sh198,332,640 being salary for the remainder of his 76 months contract coupled with Sh49,583,160 in gratuity in lieu of pension.
He also wants the court to compel the Nairobi Securities Exchange-listed firm to grant him Sh9.5 million in utility allowances (electricity, water and security), Sh3.8 million (entertainment), Sh2.5 million (medical insurance) and Sh1.1 million (servants allowance).
Additionally, he is demanding Sh7.6 million in car benefit for the remainder of his contract period.
Directly linked to his dismissal, he wants to be granted Sh126 million for damages of active career to 60 years as well as Sh55 million for the mental humiliation he has suffered.
Sheikh’s claims now cast the spotlight back on NBK ahead of hearing of the case on Monday in what, if successful, would be one of the most expensive legal settlement for a sacked employee in the corporate world.
According to court documents, Sheikh was recruited on May 31, 2012, earned a salary of Sh1,682,158 per month which was later adjusted to Sh2,145,000 in February 1, 2013 after completion of his probation.
“I discharged my duties with absolute diligence and was instrumental in crafting transformative programmes that saw the bank into a competitive and thriving bank,” he says.
“I championed the restructuring of the bank into various divisions and as a result, the bank achieved unprecedented business growth.”
He was, however, dismissed after the bank incurred a surprise net loss of Sh1.2 billion for the period to December 2015, from a net profit of Sh2.2 billion in the nine months ended September 2015.
An audit of the books later revealed glaring disparities between the bank’s financial results and the audited accounts for 2015.
On the spot were senior managers under his supervision, who were alleged to have manipulated books in a bid to siphon Sh1 billion from the lender.
The misrepresentation of financial statements was occasioned by premature recognition of sale of assets amounting to Sh800 million and under provisioning of a loan amount. It also involved the wrongful recognition of interest income leading to the overstatement of profit.
Sheikh, however, said he was not to blame for the bank’s non-performing loan portfolio.It is on that premise that he was sent on compulsory leave on allegations of gross misconduct.
Subsequently, Capital Markets Authority (CMA) fined him Sh5 million together with other senior managers for cooking the lender’s books. He was also banned from holding any position in a public listed company.
But in a dramatic twist of events, Sheikh was absolved of wrongdoing and made a State witness against his colleagues.
Those punished over the alleged fraud include Solomon Alubala (former head of Treasury), George Jaba (former chief credit officer), Chris Kisire (former chief finance officer) and Wycliffe Kivunira (the then acting finance officer).
Alubala and Kisire were suspended for 10 years and three years, respectively, from holding office in a listed firm.
Alubala was also fined Sh104.8 million while Kisire was handed a Sh1 million fine.
In his affidavit, the ex-CEO argues that he was “un-procedurally, unfairly, unlawfully and wrongfully terminated contrary to the Constitution, Employment Act and the Fair Administrative of Actions Act”.
He accuses the bank of breaching his right to fair labour practices, right to disciplinary and administrative process and denied the petitioner adequate time and opportunity to respond.
Sheikh argued that it was unfair for him to be dismissed yet investigative agencies did not find fault on his part.