HF Accountant Fired For Exposing A Sh4.3B Fraud Has Been Awarded By The Court


Bad business decisions are coming back to haunt HF which might end up being firstly and the eventuality of a collapse like the rest of other banks with bad loans and irregular business decisions. They’re struggling to seal loopholes

Yesterday, we published an article on how Housing Finance is challenging a Court of Appeal ruling that has awarded a Nairobi family Sh1.2 billion compensation after two of the three judges ruled that the mortgage lender had breached the law by selling the family’s home in Runda.

The court on Friday directed the listed company to pay damages of Sh20.4 million – which was the principal sum in dispute – to the couple. The money is to be paid together with an annual compounded interest rate of 26 percent since the year 2000 when the case was first filed in court. This pushed the penalty to Sh1.2 billion. However, Housing Finance is asking for a stay of execution of the ruling until its appeal in the Supreme Court is heard and determined.

The Court of Appeal upheld an earlier ruling by Justice Joyce Khaminwa, which had found that the sale of the house belonging Sharok Kher Mohamed Ali Hirji was illegal. The ruling said the payment should be compounded at an interest rate of 26 percent.

“The court has considered the claimant’s unchallenged lamentations about the respondent’s non-compliance with statutory and regulatory provisions as reported by him to the respondent’s management, leading to his predicament, and which factor aggravates the respondent’s action to dismiss the claimant,” the judge ruled.


In reaching the final award, Justice Ongaya said he had considered Mr Isika’s whistle-blowing and how it turned against the former HFC employee. At the time, Mr Isika was HFC’s director of credit risk and was on a monthly salary of Sh1.16 million. Six months ago, the High Court awarded Mr Isika Sh8.9 million as compensation for unlawful termination.

Justice Ongaya held that HFC’s action could not be considered to be a constructive termination. He ruled that HFC acted unfairly by not giving Mr Isika a genuine chance to respond to his charges.

“The court finds that taking into account the magnitude of the allegations in the show-cause notice, the claimant was entitled to lament that the weekend allowed to reply was not sufficient. When Monday June 20, 2016 came, the invitation for hearing was made and the claimant was not given ample time to prepare and to attend. There was no room provided in the invitation for the claimant to attend with a colleague of his choice as per section 41 of the Employment Act, 2007. The court holds that an employer should offer an employee a genuine chance by way of a notice and a hearing as per section 41 of the Act, failing which it cannot be presumed that the employee is culpable of the allegations for which no such genuine opportunity was provided. The termination was unfair in substance and procedure and the court finds accordingly,” Justice Ongaya held.

The judge held that Mr Isika was entitled to six months’ pay of Sh6.82 million and one month’s salary in lieu of notice (of termination). Justice Ongaya also ordered that Mr Isika be paid for the 20 days worked in June, 2016.


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