Court instructs lawyers to account for Sh1.8bn in Telkom case
Independent Electoral and Boundaries Commission commissioner Thomas Letangule leaves the National Assembly Justice and Legal Affairs Committee hearing in the main chambers on May 17, 2016. Mr Letangule has been told to indicate how money meant for former Telkom staff was spent. PHOTO | DIANA NGILA | NATION MEDIA GROUP
What you need to know:
- Judge Nduma Nderi of the Employment and Labour Relations Court directed lawyers Thomas Letangule, Antony Oluoch and Sylvia Maleba Kitonga to respond within 14 days.
- They are also challenging the deduction of tax from the lump sum paid to them when they agreed to settle the case out of court.
Three senior lawyers have been directed to file evidence of how they distributed over Sh1.8 billion they received on behalf of over 2,000 retrenched employees of the former Telkom Kenya.
Judge Nduma Nderi of the Employment and Labour Relations Court directed lawyers Thomas Letangule, Antony Oluoch and Sylvia Maleba Kitonga to respond within 14 days.
The case was filed by former employees of Telkom Kenya Ltd.
Justice Nderi also extended orders freezing the lawyers' bank accounts until March 14, when the case will be heard by Justice Monicah Mbaru.
Justice Mbaru recorded a consent to settle the dispute out of court in December 16, 2015.
Mr Letangule and Mr Oluoch's accounts were frozen by Justice Grace Nzioka earlier this week.
Mr Letangule is a former commissioner of the Independent Electoral Boundaries Commission.
Through their lawyers Vayonda Sirma and George Ouma, the former workers want the sued parties to "give an account of the criteria they employed in the distribution and apportionment of the money".
Mr Letangule received Sh1.3 billion and Mr Oluoch Sh500 million.
Further, it was agreed that Mr Letangule would receive Sh30 million and Mr Oluoch Sh20 million as legal fees.
And Sh150 million was to be remitted as tax to the Kenya Revenue Authority.
TAX EXEMPTION
The former workers claim that they did not receive all their dues.
They are also challenging the deduction of tax from the lump sum paid to them when they agreed to settle the case out of court, saying that then Finance minister Amos Kimunya had in legal notice number 95 of April 6, 2016 exempted them from remitting the revenue.
In the Kenya Gazette Supplement No 43, Mr Kimunya directed: “In exercise of the powers conferred by Section 13 (2) of the Income Tax Act, the minister for finance exempts from income tax lump sum retirement benefits received by employees of Telkom Kenya Limited retrenched under the Restructuring Scheme approved by the Government on February 27, 2006 shall be exempt from the provisions of the Act”.
Through that notice, Mr Kimunya directed Telkom to furnish details of all the affected employees to the taxman.
In the court documents, Mr Oluoch indicates that he recovered for the Kenya Revenue Authority over Sh150 million in taxes from the Sh500 million he received from Telkom Kenya on behalf of 1,080 staff.
