Economy

Ex-NBK boss awarded Sh26.5m for illegal ouster

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Former National Bank of Kenya (NBK) managing director Munir Sheikh Ahmed. FILE PHOTO | NMG

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Summary

  • Former National Bank of Kenya (NBK) managing director Munir Sheikh Ahmed has been awarded Sh26.5 million as compensation for unfair dismissal four years ago.
  • Employment and Labour Relations Court judge Byram Ongaya said the bank failed to prove claims of gross misconduct and misrepresentation of financial statements against Mr Munir, which formed the basis of his ouster in 2016.

Former National Bank of Kenya (NBK) managing director Munir Sheikh Ahmed has been awarded Sh26.5 million as compensation for unfair dismissal four years ago.

Employment and Labour Relations Court judge Byram Ongaya said the bank failed to prove claims of gross misconduct and misrepresentation of financial statements against Mr Munir, which formed the basis of his ouster in 2016.

“Accordingly, the reason for termination was not established at all and the court finds that it was unreasonable to dismiss the petitioner upon a general allegation that was never established,” the judge said, adding that the dismissal amounted to unfair labour practice.

Mr Munir was fired in April 2016 amid claims that the bank was making losses while financial statements presented a rosy picture of its financial health.

There were 16 months left to the end of his five-year term.

He sued the bank for unfair dismissal and claiming that the publication of his dismissal soiled his reputation.

The Judge agreed, saying: “The court considers that it is unfair labour practice for an employer, without good cause or reason, to publicise and publish adverse material about its employee in view of the contract of service and its execution as it was done in the present case, and, such publication, in the court’s opinion, amounts to unfair labour practice.”

The court, however, declined to award him damages for the anguish he suffered following the sacking.

In his submission in court, Mr Munir said he was a professional banker with over 20 years’ experience and had served at Standard Chartered Bank for over 18 years in various senior management roles before he joined NBK,

He further stated that he was competitively recruited to the position of MD in 2012 for a term of five years and served the lender with professionalism and diligence.

The bank’s board, he said, had found his performance to have surpassed the required standard in its evaluation, earning him good reviews and a salary increment.

Mr Munir said all had been well until an audit report prepared by Deloitte alleged financial misrepresentation.

The bank, in a show cause letter, pointed out to Mr Munir that it considered sending him home for gross misconduct after he allegedly failed to ensure the bank’s financial results reflected the correct position.

Mr Munir was given two hours to respond to the accusations and was required to make written representations to the chairman of the board of directors by 2 p.m. on March 3, 2016.

The board informed him of his right to be accompanied at the disciplinary hearing by a fellow employee (who was at liberty to make written representation concurrently with his) as he wished.

Mr Munir further told the court that he was required to proceed on leave pending the conclusion of the process and the decision to send him on leave was published in the media.

He defended himself saying as the CEO, he was in charge of the management team but did not solely bear the responsibility for any governance failures.

He said he ensured management operated within a controlled environment overseen by departments and that it was wrong to shift or assign governance and oversight responsibility from the board to him.

He further stated that a few days later, he was humiliated together with his familly members after he was arrested at Jomo Kenyatta International Airport on his way for holiday in Dubai.

He had sought compensation of Sh453.4 million, but the court rejected the amount.