Blow to Sacked Ernst and Young Kenya Partner in Sh450 Million Case

by Lawyer Wanz
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The court has ruled against the sacked partner at a top audit firm, Ernst & Young (EY) Kenya who had filed a petition to have 14 of his former colleagues fined and jailed for court contempt over a salary row.

Laban Gathungu had filed a case against 14 of his former colleagues in which he was seeking over Sh450 million for unfair termination.

Mr Laban Gathungu wanted all 14 partners fined at least Sh20 million each for contempt of court and two of them —Mr Gitahi Gachahi and Mr Herbert Chiveli Wasike —a jailed for six months for disobeying court orders.

Mr Gathungu, who was the public sector boss at the consultancy firm, also wanted the court to issue an order freezing at least Sh16 million in Ernst & Young’s bank accounts to guarantee his monthly payment in line with an earlier court order.

But Justice Maureen Odero dismissed the application saying there was no evidence of wilful and deliberate disobedience of the court order dated December 13, 2019.

She noted that in the orders, the court had directed that Mr Gathungu be paid one half of the salary and emoluments due to him.

However, a disagreement arose between the parties regarding what amount constitutes one half of his salary and emolument.

The plaintiff (Gathungu) asserts that one half of his salary and emoluments amount to Sh875,000 whilst the Defendant (ERNST & YOUNG LLP) asserts that the amount payable is Sh344,615. The defendant states that in compliance with the Court order it has already paid out to the plaintiff a sum of Sh2,067,692 which averment is not denied by the Plaintiff,” said the judge.

Mr Gathungu was fired after a whistle-blower accused some of his staff of corruption. By then he was leading a 2018 consultancy project in Somalia.

He had also claimed that there was disobedience of the court’s order for audit of the consultancy firm’s financial reports, partner profit allocation processes and tax returns of all partners for the period from July 2012 to December 2018.

But justice Odero said there was no evidence of disobedience, stating that the court had clearly directed that the audit be conducted by an Independent Auditor.

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