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Former Home Afrika CEO claims Sh36m over sacking

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Former Home Afrika CEO Njoroge Ng’ang’a. PHOTO | SALATON NJAU | NMG

Home Afrika #ticker:HAFR faces a Sh36.3 million compensation claim, equivalent to more than half of its gross profit, from former CEO Njoroge Ng’ang’a who has sued for wrongful dismissal.

Company sources had earlier told the Business Daily that Mr Ng’ang’a was seeking Sh7 million payout but court documents now reveal the much larger claim, which includes salary, allowances and commissions.

The real estate developer sacked Mr Ng’ang’a in September 2015 after a string of losses and replaced him with Dan Awendo.

“A declaration that the claimant’s employment services with the respondent (Home Afrika) were wrongfully or unfairly terminated,” reads one of the orders sought by the former CEO. Home Afrika reported gross and net losses of Sh61.9 million and Sh168.4 million respectively in the year ended December.

Mr Ng’ang’a says he is owed Sh7 million in the form of a commission at the rate of 35 per cent for brokering a deal with Egyptian firm Wadi Degla to build a sports complex at Home Afrika’s flagship development Migaa.

He is also seeking Sh9.2 million as 12 months’ pay for unfair termination and Sh2.3 million as three months’ pay in lieu of notice based on his monthly salary of Sh770,000.

READ: Loss-making Home Afrika sends CEO packing

Salary for the unexpired period of his contract to the completion date of October 31, 2016 at Sh10.7 million is also part of the claim, besides house allowance (Sh3.2 million), entertainment (Sh700,000) and golf club membership (Sh166,667).

Home Afrika has acknowledged the existence of the claims in its annual report but says it has not provided for the amount, some of which it has disputed. The real estate developer did not give reasons for terminating Mr Ng’ang’a’s contract at the time.

Mr Ng’ang’a is the latest executive to seek compensation after former CEO of Olympia Capital Kenneth Kareithi sued the company seeking the equivalent of an annual salary after his ouster in February 2014.

Mr Ng’ang’a left Home Afrika nearly two years after he took over from his predecessor Gerald Chege in November 2013.

The real estate developer more than halved its net loss to Sh168.4 million in the year ended December compared to Sh390 million the year before after reducing expenses.