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Ex- Uchumi CEO Ciano files KE Sh47m dismissal suit

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KENYA (DAILY NATION) – The High Court on Wednesday gave retail chain Uchumi more time to file a forensic report it seeks to rely on in its response to a case filed by former chief executive Jonathan Ciano, who is seeking Sh47 million for unfair termination.

The directive was given after Uchumi told the court that it intends to rely on the report to demonstrate Mr Ciano’s breach of contract while he served at the helm of the retail chain. KPMG, an audit firm compiled the report.

Through lawyer Patrick Lutta, Uchumi told the Employment and Labour Relations Court that it had received the report on Tuesday this week, and needs more time to file it together with witness statements to support its case.

Justice Stephen Radido directed the supermarket to file its papers by February 9, and serve Mr Ciano so that he may respond if he finds it necessary.

Mr Ciano is seeking Sh47,410,222 from Uchumi in terminal benefits and compensatory damages arising from his dismissal from employment in unfair, unlawful, and inhumane terms.

He also wants a declaration that Uchumi’s decision to terminate his contract without notice and due process amounted to an unlawful dismissal from employment.

But Uchumi reckons that Mr Ciano had through a letter dated June 13, 2015 addressed to the board’s chairperson, consciously and voluntarily resigned as the Uchumi CEO, and by another letter dated June 22, 2015 resigned as director of Uchumi.

“In view of the two letters, the termination letter from Uchumi’s chairperson was unnecessary as Mr Ciano had ceased employment,” says Uchumi in court papers. Uchumi alleges Mr Ciano failed to immediately disclose in writing to the board all interests in any ventures, contracts, or arrangements that were in conflict with the performance of his duties.

READ: Uchumi sends Ciano packing as it launches forensic audit

ALSO READ: Ex-Uchumi directors freed in fraud case

Mr Ciano is also accused of failing to stop excessive payments for services rendered to Uchumi.

“He failed to inform the strategies and business development committee of changes in interest rate from 12.75 per cent to 16 per cent. This was later signed, contrary to the board’s approval,” Uchumi said.

Mr Ciano allegedly misrepresented Uchumi’s financial position to the public and in addition did not make material disclosures on the sale and leaseback transactions on the June 30, 2014 financial statements.

He failed to document procedures and conduct due diligence on various agreements for lease for various branches yet effected payment in rent and commitment fees.

 

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