United Bank of Africa (UBA) has sacked and sued the head of its legal department for professional negligence that saw the lender lose Ksh200 million to two clients in a case that will shine the spotlight of company secretaries’ and legal advisers’ role.
Ms Sylvia Mututsi Magotsi, who served as the bank’s company secretary and head of legal affairs, is accused of failing to scrutinise documents that the two clients used as security to secure the $1.64 million (Ksh200 million) credit, causing the lender massive loss, Business Daily reports.
Ms Magotsi was sacked after an internal disciplinary hearing where she allegedly confessed to negligent behaviour. She was sent home with a Ksh2.2 million termination package.
The bank is now pursuing her for damages and compensation for the multi-million shilling loss. UBA accuses Ms Magotsi of failing to advise that standby letters of credit that the bank received as security from Suisse Bancorp for loans advanced to PES South Africa and Mits Electricals were fatally defective.
“As a result, UBA has incurred losses and hereby claims against her $1.64 million (Ksh150 million),” UBA says in court papers.
UBA says the amount it lost accounts for most of the Ksh282 million loss it recorded in the last financial year. The bank has recorded losses for five consecutive years.
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