Former KPMG Kenya senior partner Richard Boro Ndung’u has been allowed to amend his claim against KPMG International Cooperative over his removal from the accounting firm in January 2017.
The High Court granted Mr Ndung’u permission to revise his pleadings to clarify the relationship between KPMG International (KPMGI), the Swiss entity that coordinates the global network, and its member firms, as well as the duties arising from that relationship.
Mr Ndung’u was removed as a partner of the audit firm on January 13, 2017, on allegations that he had an inappropriate relationship with his former personal assistant.
He sued KPMG Kenya and was awarded Sh379 million in March 2019, but his former employer has appealed the decision.
Mr Ndung’u is now also separately seeking damages from KPMGI, arguing that the global firm failed to protect him and instead aided his removal as a partner from the regional firm.
KPMGI has opposed the claim, arguing that it is a foreign entity registered in Switzerland and has no office in Kenya.
The firm has also accused Mr Ndung’u of seeking double recovery by pursuing damages from the global entity after securing the Sh379 million award against the Kenyan partners.
The proposed amendments also seek to establish the links between Mr Ndung’u and the global firm, cite comparable cases involving its oversight of member firms, and strengthen his constitutional claims.
Mr Ndung’u cited the 2022 fines imposed by the Public Company Accounting Oversight Board (PCAOB) on three KPMG member firms and KPMGI’s takeover of KPMG South Africa as examples of the global firm’s oversight role.
KPMGI opposed the application, arguing that some of the proposed amendments introduced new causes of action, including tortious interference, an alleged automatic duty and implied fiduciary relationship, as well as failures in disciplinary action after arbitration.
The global firm argued that the claims did not arise from the same facts as the original suit and were time-barred under the three-year limitation period for tort claims.
It also accused Mr Ndung’u of introducing evidence, legal arguments and matters involving parties who were not part of the suit, contrary to procedural rules.
However in a ruling on October 8, the court rejected the objections at this stage, saying KPMGI would have an opportunity to respond to the amended claims in its defence.
‘Leave is granted to the Plaintiff to amend the plaint in terms of the draft Amended Plaint marked ‘RBN-1′, save that the following are excluded paragraphs,’ the court ruled.
Mr Ndung’u was directed to file and serve the amended plaint within 14 days of the ruling. KPMGI will then have 14 days after service to file its amended defence, including any objection based on limitation of time.
The dispute stems from a complaint Mr Ndung’u lodged in October 2016 against senior officials at KPMG East Africa Association and KPMG Kenya.
In May 2019, he sued KPMGI, alleging that the global firm failed to protect him after he raised concerns about the conduct of the regional and Kenyan leadership, instead facilitating his removal without notice, reasons or a hearing.
A Certified Public Accountant, Mr Ndung’u rose through the ranks to become senior partner and chief executive of KPMG Kenya.
He said he formally lodged the complaint on October 17, 2016, through the chairman of the Senior Partners Forum and KPMG South Africa chief executive Trevor Hoole. He added that KPMGI was also made aware of the allegations.
Three days later, on October 20, 2016, KPMG initiated internal investigations into the matter, and his then boss was notified of the complaint.
Mr Ndung’u accuses the global firm of acting as an accomplice in what he describes as machinations and deliberate actions by KPMG Kenya to deny him justice.
He argues that KPMGI failed to provide the support and protection required when he faced what he considers injustices by the Kenyan firm.
He further alleges that the global network applied double standards in handling complaints involving African partners compared with their European counterparts.
In his court filings, Mr Ndung’u argues that cases involving European partners facing comparable allegations were handled more favourably.
‘My treatment at KPMGI’s hands was therefore discriminatory and racially motivated, given the disdain they have for the citizens and the laws of Kenya in particular, and Africa in general,’ he said.
He also accuses KPMGI of violating assurances contained in its Global Code of Conduct, as well as obligations under the licence agreement governing its relationship with member firms and the Constitution and laws of Kenya.
His claim against the global firm cites alleged breaches of duty of care, the Global Code of Conduct and his constitutional rights under Articles 27, 28, 35 and 47, alongside the Fair Administrative Action Act.
Separately, Mr Ndung’u sued KPMG Kenya and was awarded Sh379 million in March 2019. The former employer has appealed against that decision.
In the case against KPMGI, he is seeking damages, arguing that the global firm failed to protect him and instead aided his removal as a partner from the regional firm.
KPMGI has opposed the claim, arguing that it is a foreign entity registered in Switzerland and has no office in Kenya.
The firm has also accused Mr Ndung’u of seeking double recovery by pursuing damages from the global entity after securing the Sh379 million award against the Kenyan partners.