KBC pensioners unable to sack lawyer in Sh18bn saga
The Kenya Broadcasting Corporation offices.
Members of the Kenya Broadcasting Corporation (KBC) staff retirement scheme have failed in their bid to sack a city lawyer who wants to be paid over Sh800 million for legal services offered in an Sh18 billion dispute with the State broadcaster.
The scheme’s board of trustees wanted to terminate the services of lawyer Morara Omoke and replace him with Gichamba & Company Advocates.
But Justice Maureen Odero has thwarted the attempts and allowed Mr Omoke’s legal fees to proceed to assessment and determination by the deputy registrar.
Stating that the attempts to change the advocate were unlawful and unprocedural, the court barred the pensioners’ plans to oust the lawyer.
The judge said the change of advocates should happen after the bill of costs raised by Mr Omoke, amounting to Sh820,242,212, is verified.
The board opposed the bill on the grounds that the sum is more than what they expected based on the terms of engagement and instructions issued when the lawyer started working for it.
The lawyer represented the KBC pension scheme in court in a case filed in 2018 seeking the recovery of unremitted pension deductions and interest from the State corporation.
The court dispute spanned four years, culminating in a judgment by Justice Maureen Onyango on April 27, 2022 in which she awarded the scheme an interest rate of 36 per cent per annum on the unremitted sums of Sh18.4 billion.
Interim court orders
The computations filed in court by lawyer Omoke show that the outstanding claim by the pensioners is Sh18,421,704,159.
During court proceedings, the scheme recovered Sh230 million from the corporation through interim court orders.
It is on the basis of the two figures and the costs of the suit awarded to the scheme that Mr Omoke computed his legal fees that he wants to be paid.
The dispute between the lawyer and the scheme was triggered by an attempt by its board to alter the value of the claim from Sh18,421,704,159 to Sh6,369,152,342 without consulting the beneficiaries/members of the scheme.
“The computations as at the date of the judgment amount to Sh18,421,704,159 but the trustees of the KBC staff retirement benefits scheme are suggesting a sum of Sh6,369,152,342 which is a reduction of approximately 65.4 per cent,” Mr Omoke told the court.
Raise the amount
According to the Advocates Remuneration Order, the fees claimed by Mr Omoke is subject to an interest rate of 14 per cent per annum and payment delays may raise the amount.
The case arose when the national broadcaster deducted employees’ monthly contributions to the scheme from their paychecks but failed to remit them as required by the Retirement Benefits Act, court papers indicate.
The withheld funds were from the employees' pension contributions and income from the scheme’s rental houses from 2011 to 2022. The non-remittance caused the scheme’s funding level to deteriorate.
Non-remittance had also exposed the scheme to regulatory censure by the Retirement Benefits Authority (RBA), including the threat of winding it up.
Members of the scheme were worried that they would retire into poverty because their employer was not discharging its obligation.
Remittances of statutory and members' deductions to pension schemes, saccos and banks are mandatory employer obligations.
