Former KPMG East Africa executive sues for wrongful dismissal

by Wakili Liam
Richard Boro Ndung’u, former KPMG East Africa head of tax and corporate services.

Richard Boro Ndung’u, a former Chief Executive Officer at KPMG East Africa has sued the company for wrongful dismissal.

Mr Ndung’u, who was sacked in 2017, over an alleged inappropriate relationship with his personal assistant, says KPMG International failed to protect him and instead aided his removal as a partner from the regional firm.

He argues racial discrimination for his sacking.

Mr Ndung’u accuses the parent firm of failing to give him a hearing and feedback on investigations over his stay in the Kenyan audit firm after he raised a complaint about plans to oust him.

He reckons that this was in breach of KPMG’s grievances and complaints code.

The former CEO is now seeking an undisclosed amount of money from the KPMG International for damages after the sack, saying it encouraged local partners to vote for his removal over inappropriate relationship with his personal assistant.

The High Court in February said the sacking of Mr Ndung’u was unlawful and ordered the Kenyan unit of KPMG to pay him Sh379.03 million.

Mr Ndung’u accuses the global firm of double standards in the way Africans and the rest of KPMG partners are treated, saying the failure to give him a hearing and protection from punishment upon being declared innocent was racially motivated.  

He said European partners facing similar accusations were handled as required by the KPMG code on complaints and treated in confidence.

“My treatment at KPMGI’s hands was therefore discriminatory and racially motivated, given the disdain they have for the citizens and the laws of Kenya in particular, and Africa in general,” Mr Ndung’u says in the documents filed at the High Court.

The tussle between KPMG and its ex-employee began on the morning of Monday, October 3, 2016 when Mr Ndung’u was summoned to the office of then CEO Josphat Mwaura at ABC Place, Westlands.

An allegation had been made against him by an anonymous person that he was having an inappropriate relationship with his personal assistant, according to court documents.

Mr Ndung’u was then asked to surrender his phone and laptop to facilitate investigations.

He was also required to leave office for two days as the investigations were conducted. Mr Ndung’u contended that although he knew it was unlawful for the CEO to confiscate his phone, he nonetheless gave them out without a fight.

The encounter with the CEO set in motion a series of events that culminated in his dismissal from the KPMG East Africa partnership.

Following the sacking, Mr Ndung’u moved to court demanding $8.2 million which was the expected earnings from 2017 to 2024 when he would reach his retirement age of 60, among other damages.

He accused his former employer of unfairly targeting him, intimidation, and non-procedural removal from partnership. The High Court directed the matter be heard by an arbitrator.

At the end of the arbitration by John Ohaga on March 6 ,2019, Mr Ndung’u was awarded an aggregate sum of Sh460.5 million (at the then exchange rates) and a further Sh1.9 million in special damages. Mr Ohaga also indicated that the award would earn interest at the rate of five percent per year until KPMG settles it.

But aggrieved by the arbitrator’s ruling, KPMG filed a case in the High Court, which reduced the payout to Sh379 million.

Mr Ndung’u said he complained against the local firm in October 2016 through the chairman of the senior partners’ forum and KPMG South Africa CEO Trevor Hoole. 

He said KPMG International was informed of the issue and three days later, the parent firm started investigations into the matter.

Mr Ndung’u accuses KPMG International of failing to impartially investigate his complaint by permitting the very person he complained about (Mr Mwaura) to investigate the matter.

He says KPMG International was in constant communication with Mr Mwaura, adding that that it was a mark of approval for his ouster.

“KPMGI has orchestrated behind the scenes, KPMG EA’s and KPMG Kenya’s filing of their initial memorandum of appeal, and a more recent notice of motion to set aside the arbitral award, to inflict upon me the maximum financial loss possible,” he said.

Mr Ndung’u, through the law firm Kithinji Marete and Company Advocates, says the fact that KPMGI earns a significant proportion of income from KPMG Kenya, meaning it cannot escape administration of justice under local law.

“KPMGI receives hefty licence fees from KPMG Kenya, under a licence agreement,” says Mr Ndungu.

KPMG international has opposed the case saying it was not properly served and the court lacks powers to hear the matter.

The global firm has also accused Mr Ndung’u of seeking double enrichment after getting millions of shillings against KPMG Kenya.

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