The bad and the ugly: Former MD exposes Britam’s dirty secrets

Cytonn CEO Edwin Dande, who has been sued alongside three others over Ksh1.17 billion fraud against the insurer, turns guns against his former bosses with an explosive dossier

The gloves are now off in the battle between Britam and former employees it accuses of financial fraud after they left to establish a rival business. The ruling by the High Court that the four who are alleged to have stolen Ksh1.17 billion be prosecuted has given the case a new twist – and momentum – that will certainly spill the dirty secrets of investment management at the Britam.

The four – Edwin Dande, Patricia Wanjama, Elizabeth Nkukuu and Shiv Arora – who held senior positions at Britam will now face trial after their spirited efforts to stop prosecution failed. After leaving the insurer, they set up Cytonn Investment Plc, which offers investing services in fund management and real estate, and is currently celebrating five years in business.

In what reads like a sneak preview of what the full trail holds, Edwin Dande who was Britam managing director but now CEO of Cytonn CEO, has given snippets of why they quit en mass in 2014.

The finer details, which verge on a Hollywood corporate fraud thriller, paint a dark picture of Britam’s internal operations by exposing cases of tinkering with client funds and outright unethical conduct sanctioned by top management including, for instance, using clients’ money to prop up its failed initial public share offering (IPO).


“The resignation was due to an operating environment that was fraught with illegalities and unethical business practices that we did not agree with,” Mr Dande says in a letter to staff today. “We could not agree to be part of actions such as illegally using client insurance funds to purchase shares of Britam to rescue a failed IPO.”


Mr Dande says they objected to using insurance funds under their management to purchase an unnamed troubled bank, which led to loss of billions of shillings of investor funds. He reveals how Britam management would avoid sending out client statements and when they did they would be out-rightly misleading.

“We resisted being forced to put excessive funds into a bank where a relative of a Britam director worked,” he adds in the document, without giving further details “but what brought matters to a head was an attempt to have us take away from clients Ksh5 billion portfolio, one that we had originated for clients, and give to the group.”

The trial will also be an opportunity to fully explain the conditions and circumstances that led to our resignation.

Following their resignation, Britam launched a full-scale assault by filing seven different suits claiming up to Ksh9.8 billion had been stolen funds. The company filed a complaint with the police, claiming the four had illegally transferred Ksh3.9 billion to bank accounts affiliated to Arcon, a real estate developer in which, interestingly, Britam has a stake.

Mr Dande, however, counters this saying the amounts were about commercial joint venture arrangements that went sour after Britam sought to renegotiate with various counter-parties. Dande and Co. see the court suits by Britam as a moved aimed at soiling their names and deterring competition. Most of the suits have since been withdrawn and the Cytonn managers reveal they have filed for judgment on costs on them.


It will also be interesting to see the kind of evidence that Britam has against the four given that it has successfully pushed the financial fraud narrative. The full trial promises to be a riveting hearing.

“We disagree with the ruling,” Mr Dande says, “but now that we have not succeeded to have the High Court stop the malicious prosecution, and knowing that we are completely innocent, we have decided to take the matter head-on and go to full trial to exonerate our names, just as we successfully exonerated ourselves before professional bodies such as the CFA Institute where the same allegations were lodged. The trial will also be an opportunity to fully explain the conditions and circumstances that led to our resignation.”


cyton img