More could have happened behind the scenes that led to the bitter rivalry between Britam and four of its former employees who unceremoniously bolted out to form a new company.
Kahawa Tungu‘s investigative desk has delved into the matter and discovered that Edwin Dande, Patricia Wanjama, Elizabeth Nkukuu and Shiv Arora who were once the senior-most officers at Britam left after a major disagreement with the company.
According to Britam insiders who spoke to Kahawa Tungu on condition of anonymity, the four rendered their resignation letters due to an operating environment that was fraught with illegalities and unethical business practices that they did not agree with.
The same is reiterated by Cytonn CEO Edwin Dande, who in his affidavit to the High Court avers that when Benson Wairegi (the current Britam Group CEO) approached him to work with them, he (Dande) insisted on working in an entity where “he had accountability for the profitability performance of the company, would allow him build a strong team and build wealth for them and the company.”
“It was envisaged that I would eventually sign a formal comprehensive contract of employment incorporating the matters I have mentioned before but this never materialised. Even though we discussed and agreed on terms, they declined to formalise them,” avers Dande.
This was the beginning of dubiety at Britam, triggering the exodus of the four en-mass. According to a statement from Dande, their former employer wanted them to use client insurance funds to purchase shares of Britam to rescue a failed IPO, which they disagreed with.
“We could not agree to be part of actions such as illegally using client insurance funds to purchase shares of Britam to rescue a failed IPO, we objected to using insurance funds under our management to purchase a failing bank – a transaction that has now led to loss of billions of shillings of investors’ funds, we objected to failure to send statements or sending out-rightly misleading statements to investors in the unit linked products, we resisted being forced to put excessive funds into a bank where a relative of a Britam director worked, but what brought matters to a head was an attempt to have us take away from clients a Kshs5 billion portfolio, one that we had originated for clients, and give to the group. At that point, the environment became untenable and we resigned,” states Dande.
Before they left, our mole at Britam states that Wairegi warned the four that they either worked for Britam or else he would ‘destroy their lives’. They chose to leave and form their company dealing with real estate, Cytonn. This did not augur well with their former employer, to whom they had posed a threat to his business.
There was one way to kill competition from Cytonn, accuse them of theft. Britam launched a full-scale assault by filing seven different suits claiming up to Ksh9.8 billion had been stolen funds. The company filed a complaint with the police, claiming the four had illegally transferred Ksh3.9 billion to bank accounts affiliated to Arcon, a real estate developer in which, interestingly, Britam has a stake.
“The aim was to waste time for the four in court, litigating. Britam wanted to scare away investors for Cytonn as there was not cause for investigation or a court case,” says our source.
Kahawa Tungu’s investigation independently learnt that Wairegi himself denied that there were ongoing investigations against the four. In a text message sent to one journalist about the issue, Wairegi said that there was nothing as such going on, only for the cases to emerge later.
The four decided to move to court seeking an injunction from being prosecuted, since the case did not hold water. They did not however succeed in obtaining the orders, after Justice John Mativo ruled that Britam’s case against them proceeds, for failing to prove that their rights were violated.
“Accordingly, I hereby dismiss the applicants notice of motion dated February 3, 2017 with no orders as to costs and direct that Nairobi chief magistrates criminal case number 1735 of 2016 proceeds to hearing and determination,” ordered Justice Mativo.
But what could be the motive of Britams four-year old case in court?
“We disagree with the ruling, but now that we have not succeeded to have the High Court stop the malicious prosecution, and knowing that we are completely innocent, we have decided to take the matter head-on and go to full trial to exonerate our names, just as we successfully exonerated ourselves before professional bodies such as the CFA Institute where the same allegations were lodged. In addition to exonerating our names, the trial will also be an opportunity to fully explain the conditions and circumstances that led to our resignation,” reads the statement from Dande.
In a series that we will be running, we will inform you of the behind-the-door happenings that have led to the rivalry between the two companies, and the motive behind the endless court cases.
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