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Citizen Weekly

Sunday, 29 March 2015

Queries as lawyer who lost case demands Sh200m from KPA

A Mombasa law firm’s demand for payment of over Sh200 million as legal fees for representing Kenya Ports Authority pension scheme in a legal dispute that it lost has turned controversial after trustees sharply disagreed with a top KPA manager on the matter.
At a meeting called early last week to among other things approve the fees and ratify sale of pension scheme properties, elected trustees of defined benefits scheme who represent workers in the fund openly disagreed with KPA head of legal services Muthoni Gatere on the settlement of the huge legal fees.
Sources in the meeting at Mombasa’s Canon Towers building pointed out that all the trustees present were unanimous in rejecting the legal fee note from Kinyua Muyaa.
The trustees were reportedly taken aback that Gatere who is also KPA corporation secretary appeared to be pushing for settlement of the legal fee against expectation that she would join them in rejecting the demand on grounds that the amount being sought was inflated and if settled would deal a serious dent on the workers retirement benefits.
The trustees sought to know from Gatere why the law firm should be paid such a huge figure when the dispute it was picked to deal with was lost in favour of the retirees who were awarded Sh267 million by the Industrial Court. The KPA retirees had gone to court to dispute the method used in calculating their pension.
And the trustees demanded to know from Gatere the reasons that make the lawyer for the retirees who won the case and helped to secure for them a princely sum of Sh267 million would only be paid Sh9 million in legal fees while the fund’s lawyer who lost the case wants to be paid a whopping Sh202 million.
As the trustees stood their ground in rejecting what they described as attempts to loot the pension scheme resources, an irritated Gatere who is the DB pension’s secretary shouted at them, a move that prompted the disappointed trustees to walk out of the board room.
It was not immediately clear who appointed Kinyua Muyaa to act for the fund. However, according to a letter written by the law firm to the pension secretary who happens to be Gatere dated February 18 2015, the firm acknowledged having already been paid  Sh 7.7 million, adding that they were still owed over Sh195 million by the pension fund in legal fees.
The controversy over the payments arise from court proceedings on Industrial case no 116 of 2013, Court of Appeal civil application no 31 of 2014 and civil appeal no 38 of 2014.
Meanwhile, apart from the lawyer’s fee, another issue causing heat in the pension fund is an attempt to loot the pension properties by disposing them cheaply. The properties include houses in Mombasa, Nairobi and Kisumu and plots in prime areas.
A certain real estate firm associated with a top port manager is being favoured. Last year, it was appointed to sell some properties on behalf of the pension, something that did not go down well with the trustees. Port employees have threatened to paralyse operations if their pension is mismanaged and stolen by some top KPA managers in collusion with some cartels.
Instructively, the current pension trustees are more enlightened and are insisting on proper legal procedures to be followed unlike in the past when decisions would be made elsewhere  in someone’s house and the trustees who have since been voted out would adopt the decision without questions as long as they were palm greased, it is being pointed out.
As such, the cartels who are salivating for the multi-billion shillings workers properties are regretting for having failed to spend heavily to have their cronies elected on the fund.
Already after realising that the trustees in both DB and DC are stubborn  in letting cartels have their way, there is a plot privatise one of the schemes to be managed by a Nairobi firm, as move that will hide its operations from the trustees.
The KPA pension scheme which has since been split into two categories going by the names Defined Benefits and Defined Contribution has in the past been a cash cow for the well connected.
But in the past few years, sanity was restored and the fund realised a historic growth. In the last ten years, the fund reportedly grew from Sh2.5 billion to the current worth of Sh23 billion. Apparently, it is this prosperity that has prompted cartels to work out schemes on how to steal the money.