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Ex-Jamii Bora boss wants Sh78m pay


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Ex-Jamii Bora boss wants Sh78m pay


Timothy-Mwaniki

Former Jamii Bora Bank chief executive Timothy Kabiru. FILE PHOTO | NMG

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Summary

  • The former chief executive of Jamii Bora Bank, Timothy Mwaniki Kabiru, is demanding an exit compensation of Sh78 million from the lender, which was acquired by Co-op Bank and renamed Kingdom Bank.
  • The demand has met stiff resistance from Kingdom which says Mr Kabiru cooked up a scheme to walk away with the money without justification and evidence of board meetings backing the payout.
  • Co-op Bank acquired a 90 percent stake in the former Jamii Bora Bank in August last year at a cost of Sh1 billion and overhauled the board including appointing Anthony Mburu as the new CEO.

The former chief executive of Jamii Bora Bank, Timothy Mwaniki Kabiru, is demanding an exit compensation of Sh78 million from the lender, which was acquired by Co-op Bank #ticker:COOP and renamed Kingdom Bank.

The demand has met stiff resistance from Kingdom which says Mr Kabiru cooked up a scheme to walk away with the money without justification and evidence of board meetings backing the payout.

Co-op Bank acquired a 90 percent stake in the former Jamii Bora Bank in August last year at a cost of Sh1 billion and overhauled the board including appointing Anthony Mburu as the new CEO.

The lender’s original shareholders, including Mr Kabiru, were squeezed into a 10 percent stake in the rescue deal.

On November 3, 2020, Mr Kabiru delivered a letter to Kingdom dated the previous day demanding Sh78 million based on a mutual release and separation agreement dated June 10, 2020.

The amount was tabulated as 36 months of gross payment amounting to Sh74.2 million and 46 unused leave days running up to Sh3.7 million.

Kingdom responded through two letters dated November 11, 2020 and November 19, 2020 rejecting the claim.

Mr Kabiru then launched an arbitration process which has since been stopped by a court case initiated by Kingdom.

“That the applications by the parties seeking stay of proceedings herein and before the arbitrator tribunal are hereby consolidated for hearing and determination,” Lady Justice Monica Mbaru of Nairobi’s Employment and Labour Relations Court ordered on February 11, 2021.

“That to allow the court to be seized of all matters between the parties, [there] shall be stay of proceedings by the arbitral tribunal.”

The parties were given seven days to file and serve affidavits.

In its application, Kingdom says that the pay demand is a personal ambush carried out by Mr Kabiru on Co-operative Bank, which did not receive any material disclosure relating to the amount when it was conducting due diligence in the transaction.

“While the respondent fully knew that the bank was operating under negative equity … purported to award himself a large sum of money simply because he knew that a third party investor, Co-op Bank, was coming to take over the ailing bank with a view of turning around its financial performance,” Kingdom’s advocate Munyalo Nthuli said in the application.



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