BY SAM ALFAN.
A legal battle between KPMG and its former partner Richard Boro Ndung’u will now proceed to the appellate court.
This is after the audit firm signaled the intention to challenge the decision to award millions to Ndung’u before court of Appeal in an attempt to overturn high Court decision.
The firm told High Court Judge Francis Tuiyott that it intends to appeal against the more than Sh343.5 million he awarded Ndung’u.
Although the amount was a reduction from the earlier figure of Sh460 million awarded to Ndung’u by an arbitrator, KPMG said it was not satisfied by Justice Tuiyott’s decision.
The judge gave the company the greenlight to move to the Court of Appeal to challenge his decision.
“The Appellants who have signaled their intention to appeal this Court’s decision will have to move the Court of Appeal under Section 39(3) (b) of the Act,” the Judge said.
In his decision, Justice Tuiyott knocked out an award of Sh35.5 million initially awarded to Ndung’u by the arbitrator. The Judge also reduced special damages by Sh661,430 and aggravated damages of Sh2.7 million.
Justice Tuiyott noted that although Ndung’u had not given a formal notice of his intention to retire on August 31, 2019, he had given that indication in at least two association meetings.
“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. To do so would be to confer a profit on him,” he said and reduced more damages by Sh86.8 million.
Ndung’u fell out with KPMG in 2016. Before they fell out, Ndung’u was an equity partner in KPMG (K) and a member of KPMG (EA).
In the documents filed in court showed that Mwaura told him that he had received information that he was involved in an inappropriate relationship with his personal assistant. He was then asked to surrender his phone and laptop to facilitate investigations as they would be subjected to forensic imaging.
He was also required to leave office for two days as the investigations were conducted.
Ndung’u contends that although he knew it was unlawful for the CEO to confiscate his phone he nonetheless gave them out without a fight.
Ndung’u told the commercial Court that he was assured that the investigations would be completed in a day or two and was in the meantime required to keep off the offices of KPMG (EA) so as not to interfere with the investigations. On October 7, 2016, he received communication that investigations were still ongoing
In his view the investigations were taking longer than anticipated and this caused him anxiety.
In October 2016, Ndung’u wrote to Trevor Hoole, the chief executive of KPMG-Southern Africa raising his concerns about the treatment from the local CEO after the investigations took longer than expected.
Upon receipt of the complaint, Trevor Hoole escalated the issue to KPMG International who dispatched two senior officers to look into the complaint.
In late 2016, the CEO informed Ndung’u that he had discussed the complaint he had made to KPMG International and that the Executive Committee(EXCO) of KPMG (K) had expressed the view that it was no longer desirable that he and the CEO continue with one on one meetings in relation to the allegations.
The CEO and two other partners met him at a club, where they informed him of the decision by KPMG (K) to ask for his resignation in exchange for a financial settlement. He rejected the proposal and the meeting was adjourned.
But Ndungu’s grievance was that after his complaint, the CEO brought to the attention of the partnership various matters which he considered concluded.
These are matters that the CEO had resolved without communicating them to the partnership and on the basis of these matters, the CEO convened a meeting on December 16, 2016, to deliberate, inter alia, the complaint by Ndung’u to KPMG International and action to be taken in that relation.
And he alleged that in the meeting he was asked to leave in order to allow the parties to discuss his conduct.
In a subsequent meeting in January 2017, KPMG (EA) voted to remove Ndung’u as a partner, triggering the court case.
