Court orders Rubis to pay fired boss of oil firm Kobil Sh34.6m

Former KenolKobil Managing Director David Ohana has won a reprieve in his suit against his former employer over unfair termination following the firm’s Sh35 billion acquisition by Rubis Energie in 2019. 

The Employment and Labour Relations Court recently ruled that the oil marketer unfairly sacked Mr Ohana and is liable to pay him Sh34.6 million in compensation.

“The Court inevitably concludes that the termination of the claimant’s service was unfair on account of failure by the respondent to prove that the reasons for termination were valid and fair,” stated the court in its judgment in part.

Mr Ohana was appointed the Group Managing Director of KenolKobil in 2014 for a three-year term, which was renewed in 2017 up to December 2019. 

In March 2019, French Oil firm Rubis Energie acquired the firm and three months later Mr Ohana was placed on suspension and issued with a show-cause letter based on alleged non-performance as Group MD.

According to court documents, internal investigations by the firm’s Board of Directors found that between January 2019 to May 2019, KenolKobil’s gross profits fell 27 per cent, while operating income went down 46 per cent.

“The respondent’s net income went down by 52 per cent consequently spawning a net loss of an astonishing $6.4 million (Sh833 million),” states court proceedings in part.

The firm suspended Mr Ohana with full pay and later terminated his employment offering to pay him $267,835 (Sh34.5 million) in terminal dues. 

However, the firm argued that he had irregularly awarded himself $250,000 (Sh32.2 million) in advanced bonus and $85,555 (Sh11 million) in cost of living adjustment pay and that it was the former MD instead who owed Kenol-Kobil ($67,719) Sh8.7 million.

On his part, Mr Ohana claims the firm was still profitable and in five months made $6 million (Sh774 million) in net profits, though the margin had reduced.

He further said that Rubis Group MD Cochet Christian informed him over dinner in March 2019 that he had to leave his position because the company could not afford his salary. The following month, the firm brought in Jean-Christian Bergeron as his replacement.

Employment and Labour Relations Court Justice Jorum Abuodha found that Mr Ohana, who earned a monthly salary of Sh3.6 million, was justified maximum compensation of twelve months’ salary for unfair termination.

Rubis Energie’s Sh35 billion buyout of KenolKobil was marked by controversy after the Capital Markets Authority, CMA launched investigations into alleged insider trading.

CMA investigations revealed that a total of 62.6 million Kenol-Kobil shares worth Sh938 million were traded days before the takeover announcement, with potential illegal gains of Sh503 million.

The markets regulator accused stock brokerage firm Kestrel Capital, its MD Andre DeSimone, stockbroker Aly Khan Sachu and Mr Ohana of insider trading and seized Sh485 million from the suspicious trades.