Kenya Re Board chairman David Kemei claims that the firm’s performance in the past three years had deteriorated, forcing the board to intervene.
Sacked managing director Jadiah Mwarania moved to court last week where he obtained orders restraining the board from filling the MD’s position.
Mr Kemei claims that Mr Mwarania ignored the recommendation by Board’s Risks and compliance committee in February 2017 directing him to engage A.M.Best to understand their rating model.
His negligence allegedly led to the firm being downgraded from B+ to B in February 2018, which reduced it from stable rating to vulnerable.
Kenya Re #ticker:KNRE Board chairman David Kemei has claimed the sacked managing director, Jadiah Mwarania, lost his job over non-performance.
Mr Kemei in a response to Mr Mwarania’s suit challenging his removal from office claims that the firm’s performance in the past three years had deteriorated, forcing the board to intervene.
Mr Mwarania moved to court last week where he obtained orders restraining the board from filling the MD’s position.
His exit was announced through a Nairobi Securities Exchange (NSE) notice which indicated that Michael Mbeshi, the reinsurer’s property management general manager, would take over as acting managing director. The notice was signed by Mr Kemei.
“That from the attached AM Best Reports, the Corporation’s Financial Strength Rating was B+ with a stable outlook for many years up to the year 2015. In 2016, due to failure by the applicant to address weaknesses raised in previous reports, the ratings agency revised the outlook downward from stable to negative,” says Mr Kemei.
He says that this performance triggered a chain of interventions and recommendations from the board, which Mr Mwarania allegedly ignored.
Mr Kemei claims that Mr Mwarania ignored the recommendation by Board’s Risks and compliance committee in February 2017 directing him to engage A.M.Best to understand their rating model.
His negligence allegedly led to the firm being downgraded from B+ to B in February 2018, which reduced it from stable rating to vulnerable.
He says that this will negatively affect the business since it will be difficult to attract international business that contributes 40 per cent of the firm’s reinsurance premiums.
The chairman claims that instead of handling the disciplinary matter internally, Mr Mwarania approached third parties who made calls to intervene.
He distances himself from claims by Mr Mwarania that his woes started the moment he received a letter from Chief of Staff and Head of Public Service Joseph Kinyua directing him to commence the removal of Mr Kemei and board members Maina Mukoma and Chiboli Shakaba.
Mr Kemei says he is not privy to this correspondence.
The sacked CEO was appointed to the helm of Kenya Re on April 11, 2011, but has served the corporation for more than 20 years, including as general manager for reinsurance operations.
Mr Mwarania’s current contract was to run until April 2021.
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