Ex-UBA executive fired in Sh200m loss row sues bank
UBA branch in Community Area, Nairobi. PHOTO | FILE
What you need to know:
Ms Magotsi has questioned the constitution of the disciplinary hearing which she argues, as per the bank policies, is to be formed by board of directors.
She now wants the bank to pay her one year salary of Sh6.2 million plus interest, general damages and legal costs.
A company secretary at United Bank for Africa Kenya (UBA) dismissed for the loss of Sh200 million has countersued the lender seeking millions of shillings in damages.
Sylvia Mututsi Magotsi, who served as company secretary and head of legal affairs until last January, has blamed her woes on the new managing director and her refusal to approve transactions that are non-compliant with the bank’s policies.
She was dismissed after the bank claimed in an internal disciplinary hearing that she was responsible for professional negligence that resulted in the loss of Sh200 million to two clients.
“The (appointment of a new) managing director on August 26, 2014 brought with it a downturn to management style, approach and expectations leading to the controversy between the parties,” said Ms Magotsi in her court papers.
The loss is said to have originated from her failure to scrutinise documents submitted by two loan applicants, leaving the bank exposed.
Ms Magotsi has, however, countered that she was not involved in the loan appraisal process done by the general counsel based in Nigeria, where the bank is headquartered.
“The claimant was not involved in the aforementioned process either at the approval stage or at the transmission of the guarantee. The accusation that she failed to note that the guarantee was not from a first-class bank is, therefore, misplaced,” she said.
UBA accuses Ms Magotsi of failing to advise that standby letters of credit received as security from Suisse Bancorp for loans advanced to PES South Africa and Mitts Electrical were fatally defective.
She counters the securities and collateral section of the bank required the borrower to provide a guarantee from African Trade Insurance or a standby letter of credit from Credit Suisse Bancorp or any first-class bank acceptable to the lender.
“It was obvious from the approval terms that Credit Suisse Bancorp had been considered and accepted,” argues Ms Magotsi.
She now wants the bank to pay her one year salary of Sh6.2 million plus interest, general damages and legal costs. The bank had paid her Sh2.2 million termination package but froze her accounts.
She has also filed a transcript of the internal disciplinary hearing arguing that she never admitted to the charge of negligence as alleged by the bank. Ms Magotsi has questioned the constitution of the disciplinary hearing which she argues, as per the bank policies, is to be formed by board of directors.
UBA appointed Isaac Mwige as its new managing director last year from Equity Bank where Ms Magotsi worked till 2009 when she was poached by UBA.
She notes that over her five-year service to the bank she received salary increments and promotions in recognition of her contribution the latest being in October last year.
UBA says the amount it lost in the two transactions accounts for most of the Sh282 million loss it recorded in the last financial year. The bank has recorded losses for five consecutive years.
UBA last year sunk deeper into the red with the Sh282 million loss compared to Sh272 million in 2013, taking its cumulative losses to Sh1.27 billion.
