Ex Britam staff face breach of trust charge

Financial services firm British-American Investment Company’s (Britam) legal fight with four former employees is turning out to be a precedent-setting case of breach of trust between an employer and an employee.

The dispute has generated heat and accusations within property investment firms, and the Director of Public Prosecution has recommended prosecution of the former Britam managers over alleged irregular transfer of funds.

At the centre of the dispute is Sh3.9 billion, which Britam claims was fraudulently transferred by its former managers Edwin Dayan Dande, Elizabeth Nailantei Nkukuu, Patricia Njeri Wanjama and Shiv Arora to five rival companies whose accounts were frozen to preserve the disputed cash.

British-American Asset Managers Limited and Baam Advisory LLP, both subsidiary companies of Britam, went to court claiming that the former managers fraudulently syphoned off Sh3,944,558,634 and channelled  the money to other companies before resigning their posts.

Justice David Onyancha then ordered Mr Dande, Ms Nkukuu, Mr Wanjama, Mr Arora, their company Cytonn Investments Management Limited, and Acorn Group Limited not to withdraw any money from accounts held by the five companies.

The order will be in force until the case is concluded because the judge declined to set them aside, meaning the companies will have to look for alternative sources of funding to advance their property investment businesses.

AFFECTED COMPANIES
The affected companies are Edenvale Developments LLP, Starling Park Properties LLP, Crimson Court Development LLP, Sinopia Properties LLP and Mikado Properties LLP.

According to Britam Acting Chief Executive Officer Jude Anyiko Oluoch, the former managers took over management of the five companies and replaced Britam representatives soon after they resigned from their posts.

Whereas Britam maintains that the dispute is about breach of trust and fraudulent transfer of money from its accounts, Acorn Group Limited countered the allegations, saying the suit is a witch-hunt because it refused to agree to Britam’s insistent request to have a majority stake in the company.

“Once Britam realised that Acorn was not willing to accede to its demands for larger shareholding, they orchestrated a deliberate plot to arm-twist Acorn Group by unilaterally stopping funding and filing the case to freeze the accounts,” Acorn Chief Executive Officer Edward Kirathe said in his response.

Mr Dande, the former Britam chief executive, who now heads Cytonn, also defended the move to transfer the amounts saying top Britam management were aware of the deals and that they cannot turn around to accuse them of theft.

TRANSFER NOT SANCTIONED
Mr Oluoch had stated that the huge transfer was not sanctioned by Britam and given that the former managers occupied positions of trust and had a fiduciary relationship with the company, they misused those positions to illegally transfer the money.

“Mr Dande and Ms Wanjama exchanged e-mail correspondence embodying a conspiracy to do things that had not been approved by Britam Board of Directors,” Mr Oluoch said. “The conspiracy entailed fraudulent, irregular and unauthorised withdrawals of funds from our accounts.”

He swore that the four former employees signed secret agreements for Britam to make contributions to real estate projects undertaken by the five companies before they resigned their positions and crossed over to the rival firms.

“My inquiry with our administrator in Mauritius confirmed that Sh1.1 billion was transferred in July to bank accounts of the five companies on the instructions of Mr Dande, Ms Nkukuu and Mr Arora without approval of the investment committee,” Oluoch stated.

AWARE OF DEALINGS
But in his rejoinder, Mr Dande filed copies of meeting minutes he insists are evidence that directors of Britam, were aware of their dealings with the other companies.

“We wired money from BAAM Real Estate Fund as equity disbursements for the sums that were due with respect to the various real estate deals that were pending completion,” Mr Dande said.

But according to Britam, the former officials concealed their activities by deleting e-mail exchanges containing the information.

The exchanges are currently subject of investigations by criminal investigation officers.