- Britam claims in its complaint that the four former executives had, before resigning, formed a competing firm — Cytonn Investments and hijacked clients with multi-billion shilling projects for their new firm.
- It also claims that the four Cytonn directors illegally transferred Sh1.1 billion from Britam’s accounts to real estate firm Acorn Group.
Fund manager Britam Asset Management has opened a fresh battle against four former executives – now working as Cytonn Investments directors - seeking their removal from the roll of accountants, advocates and financial analysts for allegedly colluding to rob it of Sh7 billion.
The fund manager claims that the four Cytonn directors transferred Sh7 billion from a client account to their own firm before resigning from Britam two years ago.
It is the second time that Britam is seeking punitive action against its former employees who decamped to form their own firm, having initially sued the four in a case that is still pending in court.
Britam’s latest action has seen it file a formal complaint with the Institute of Certified Public Accountants of Kenya (ICPAK) against its former portfolio manager, Elizabeth Nkukuu.
The fund manager has filed a separate complaint with the Law Society of Kenya’s (LSK) disciplinary committee against its former head of legal, Patricia Wanjama, while former investment analyst Shiv Arora is facing a similar filing with the Institute of Certified Financial Analysts (ICFA).
Details of this fresh battle have been revealed in a suit Ms Nkukuu has filed to stop ICPAK from hearing the complaint, arguing that the dispute with her former employer can only be determined by the Labour court.
Britam claims in its complaint that the four former executives had, before resigning, formed a competing firm — Cytonn Investments and hijacked clients with multi-billion shilling projects for their new firm.
It also claims that the four Cytonn directors illegally transferred Sh1.1 billion from Britam’s accounts to real estate firm Acorn Group.
“The said complaint highlights that together with others you illegally transferred clients’ money amounting to Sh7 billion from Britam accounts to a company associated with Cytonn. That you took advantage of the client database and took over projects initiated and funded by Britam leading to loss by Britam and its affiliates, loss of funds advanced under lending arrangements and the loss of clients,” ICPAK says in a letter to Ms Nkukuu, which has been filed in court as evidence.
Justice George Odunga has temporarily stopped ICPAK from proceeding with hearings of Britam’s complaint against Ms Nkukuu until he has determined the suit.
The four Cytonn directors are also awaiting a court decision on whether they should be prosecuted in the criminal court.
Last year, the four filed a suit before Justice Odunga and obtained a temporary order stopping their prosecution.
The four resigned from Britam in 2014 to start their own fund management business, sparking a vicious legal battle with their former employer. Britam filed six suits against them in the civil and criminal court.
Britam has since withdrawn the five civil suits after reaching an out-of-court deal that saw Acorn refund Sh5 billion in cash and land.
The deal also saw Acorn return several lucrative projects to Britam. The sixth suit — a criminal one — stalled after Justice Odunga issued the order delaying prosecution of the Cytonn directors.
In her suit, Ms Nkukuu holds that ICPAK has no authority to preside over Britam’s complaint as it involves allegations of contract breach, which fall exclusively in the hands of the Labour court.
She has also protested at being excluded from the ICPAK hearings, arguing that the move has left a one sided account of events being narrated by Britam.
Britam filed the complaint in 2015 but hearing of the dispute only commenced in August this year. Ms Nkukuu was informed of the complaint in January last year and she responded to the allegations a month later.
“Thereafter I did not hear from ICPAK until I received a letter dated August 30, 2016 informing me that the committee held a hearing on August 26 and that Britam had tabled its written arguments.”
“ICPAK has never addressed or at any rate communicated to me, my objections based on its jurisdiction to entertain the complaint. It has never given me an opportunity to participate in the said hearing, including the right to challenge whatever evidence would be used against me,” Ms Nkukuu holds.
She has, however, not gone into detail of the nature of the complaints filed against Mr Arora and Ms Wanjama before the CFA Institute and LSK tribunal respectively.
Justice Odunga will hear Ms Nkukuu’s case on February 6.