Money Markets
By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
- Ms Magotsi has questioned the constitution of the disciplinary hearing which she argues, as per the bank policies, is to be formed by board of directors.
- She now wants the bank to pay her one year salary of Sh6.2 million plus interest, general damages and legal costs.
A company secretary at United Bank for Africa Kenya
(UBA) dismissed for the loss of Sh200 million has countersued the lender
seeking millions of shillings in damages.
Sylvia Mututsi Magotsi, who served as company secretary and
head of legal affairs until last January, has blamed her woes on the new
managing director and her refusal to approve transactions that are
non-compliant with the bank’s policies.
She was dismissed after the bank claimed in an
internal disciplinary hearing that she was responsible for professional
negligence that resulted in the loss of Sh200 million to two clients.
“The change of guard of the managing director on
August 26, 2014 brought with it a downturn to management style, approach
and expectations leading to the controversy between the parties,” said
Ms Magotsi in her court papers.
The loss is said to have originated from her
failure to scrutinise documents submitted by two loan applicants,
leaving the bank exposed.
Ms Magotsi has, however, countered that she was not
involved in the loan appraisal process done by the general counsel
based in Nigeria, where the bank is headquartered.
“The claimant was not involved in the
aforementioned process either at the approval stage or at the
transmission of the guarantee. The accusation that she failed to note
that the guarantee was not from a first-class bank is therefore
misplaced,” she said.
UBA accuses Ms Magotsi of failing to advise that
standby letters of credit received as security from Suisse Bancorp for
loans advanced to PES South Africa and Mitts Electrical were fatally
defective.
She counters the securities and collateral section
of the bank required the borrower to provide a guarantee from African
Trade Insurance or a standby letter of credit from Credit Suisse Bancorp
or any first-class bank acceptable to the lender.
“It was obvious from the approval terms that Credit Suisse Bancorp had been considered and accepted,” argues Ms Magotsi.
She now wants the bank to pay her one year salary
of Sh6.2 million plus interest, general damages and legal costs. The
bank had paid her Sh2.2 million termination package but froze her
accounts.
She has also filed a transcript of the internal
disciplinary hearing arguing that she never admitted to the charge of
negligence as alleged by the bank. Ms Magotsi has questioned the
constitution of the disciplinary hearing which she argues, as per the
bank policies, is to be formed by board of directors.
UBA appointed Isaac Mwige as its new managing
director last year from Equity Bank where Ms Magotsi worked till 2009
when she was poached by UBA.
She notes that over her five-year service to the
bank she received salary increments and promotions in recognition of her
contribution the latest being in October last year.
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