Additional Reporting BY BUSINESS DAILY
A court ruling has ordered Equity Bank to pay a former employee nearly Sh. 79 million.
This huge pay is part of the cash he was to receive after leaving Equity Bank’s Employee Stock Ownership Plan (Esop) eight years ago.
The order, which was issued last Friday, also opens doors for other former Esop members who may have also forfeited cash after the bank applied a contested law.
According to the Business Daily, Equity had introduced Esop in 2005, a type of employee benefit plan intended to motivate employees through ownership of the company.
Samuel Gachie Kamiti claimed he had invested in shares that would have seen him walk away with Sh. 103,274,010 at the time of leaving in 2010 but the bank refunded him only Sh. 24,330,000 through a credit transfer into his account.
High Court judge Francis Tuiyot has faulted the bank and the trustees for changing the rules governing Esop which effectively cut Mr Kamiti’s entitlement without informing him in advance.
Under the amended rules he could not get market value for his units if he resigned from the bank. The lender and trustees were well aware that the decision he was making to leave the company would have a huge impact on his investment in the units.
“The bank and trustees did not advise him on the implication. They were at the very least cynical. They watched a unitholder make a decision that would substantially reduce the value of his redemption without telling him that the rules have changed,” said Mr Tuiyot.
The judge said the trustees failed to act in the best interest of Mr Kamiti and watched him make a decision that was obviously detrimental to his interest.