Home Business NBK faces auction after losing Sh136m pension case

NBK faces auction after losing Sh136m pension case


Companies

NBK faces auction after losing Sh136m pension case


nbk

National Bank of Kenya branch. FILE PHOTO | NMG

BDgeneric_logo

Summary

  • 134 former bankers can now instruct auctioneers to sell the bank’s property in order to get their dues.

The National Bank of Kenya (NBK) #ticker:NBK has lost an appeal to stop former employees from seizing its assets over Sh136 million in unpaid terminal dues.

Three Court of Appeal judges said the bank’s petition lacked merit as it was seeking “to stay negative orders”.

NBK, which is now owned by KCB Group #ticker:KCB, was appealing an Employment and Labour Relations Court ruling, issued last year, that had dismissed its case against the Retirements and Benefits Authority (RBA) and ordered it to the 134 ex-staff their dues.

In 2012, the RBA tribunal had order NBK to pay the former workers the difference of the amounts, plus interest, they had received when they left the bank.

But the bank’s pension scheme moved to court seeking a judicial review challenging the directive, claiming that RBA had acted in excess of its legal mandate.

Lady Justice Maureen Onyango, however, upheld the ruling saying NBK was not entitled to the review orders it sought for flouting the trust schemes rules.

The court established that it had under-calculated the workers’ pensions when they left employment.

The appellant judges Daniel Musinga, Gatembu Kairu and Jan Mohammed said NBK had failed to seek a stay of execution of the RBA directive where the lender was directed to pay the claimants.

“The orders issued by Labour court cannot be executed as they are negative orders,” ruled the judges.

They said a stay of execution cannot be granted when the intended appeal is against a negative order.

“The judge did not grant a positive order which was capable of execution. If the stay order is granted, it will have an indirect effect of reviving the dismissed application. This court cannot undo at this stage what the court has done,” the appellate judges said.

Following the dismissal, the 134 former bankers can now instruct auctioneers to sell the bank’s property in order to get their dues.



Source link