Deloitte & Touche LLP in vicious fight with partner, Amaha Admassie, over expulsion bid

One of Deloitte's partners, Amaha Bekele Admassie who has moved to court seeking to block the termination of his partnership at the firm. PHOTO | DELOITTE

An attempt by the local arm of British audit firm Deloitte & Touche LLP to part ways with one of its eight partners, Amaha Bekele Admassie, has triggered a vicious court battle in which the two warring sides have traded multiple allegations against each other.

This is after Mr Admassie sued Nairobi-based Deloitte & Touche seeking to block attempts to terminate his partnership and challenging three clauses of the firm’s Africa Partner Manual – the consultancy’s rule book.

High Court judge Nixon Sifuna in May issued orders stopping Deloitte & Touche, one of the “Big Four” accounting firms in the world, from expelling Mr Admassie pending a hearing and determination of the suit.

In limited liability partnerships such as Deloitte & Touche, the business is owned by partners. Rather than salaries, the partners draw profits based on the company’s income in a particular period.

Mr Admassie’s lawyers, Wambugu & Muriuki Advocates, argue that Deloitte & Touche failed to accord their client a hearing before a council of partners before deciding to part ways with him.

But Deloitte argues that there is no entity within its structures referred to as a council of partners.

“Despite still being a partner at the 1st defendant (Deloitte & Touche LLP), the plaintiff’s (Mr Admassie) access to his work email and Microsoft 365 account have been restricted. The plaintiff is unable to work all at the behest of the 2nd (Anne Muraya) and 3rd (Graeme Berry) defendants,” the lawyers representing Mr Admassie say in court papers.

Deloitte & Touche, like PriceWaterhouseCoopers (PwC), Ernst & Young and KPMG, is a local arm of a British consultancy.

The firm’s lawyers, Hamilton Harrison & Mathews, have filed an application seeking to refer the dispute to arbitration, citing a clause in Deloitte & Touche’s partnership agreement with Mr Admassie.

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Arifa-Morbi Sheikh, Deloitte & Touche LLP’s chief risk manager, argued that Mr Admassie signed the partnership agreement and was aware of all its clauses.

Mr Sheikh holds that Mr Admassie was expelled from Deloitte & Touche partnership on May 12, 2023, but did not appeal to the Africa Board as provided for in the partnership agreement.

He says in court papers that Mr Admassie’s expulsion was given the green light by Deloitte & Touche’s Africa CEO.

Deloitte insists that the expulsion was sparked by Mr Admassie’s failure to complete 10 mandatory professional trainings between 2018 and 2022.

Mr Admassie, says the firm, willingly agreed to be bound by terms of the Africa Association Agreement and Country Partnership when he signed them upon being made a Deloitte & Touche LLP partner.

He allegedly also failed to file independence declarations in 2018. The firm says it issued Mr Admassie with transgression letters for the alleged breaches.

“Taking into account the plaintiff’s conduct and failure to comply despite numerous warnings and discussions even at the executive level, the plaintiff was invited to discuss a separation by mutual agreement as provided under clause 6.1.7 of the partner manual,” Mr Sheikh says in an affidavit.

Mr Admassie claims that in 2020 his housing allowance was unfairly stopped, with an order that he sorts out his own rent, despite being an expatriate.

But Deloitte & Touche argues that housing allowances for expatriates in Kenya and Tanzania were scrapped off as part of the firm’s policy, and did not affect only Mr Admassie.

Mr Admassie also argues that Deloitte & Touche has refused to furnish him with a draft mutual separation agreement that he can edit.

The firm insists that it sent all documents Mr Admassie requested for and even extended the planned exit date following back and forth that delayed completion of the process.

Deloitte & Touche has denied claims that its officials threatened Mr Admassie to sign the mutual separation documents.

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Mr Admassie took a $279,000 (Sh39 million) loan from Absa Bank to buy shares in Livingstone Registrars, a company owned by Deloitte & Touche partners and through which they own Deloitte Place – a building on Nairobi’s Waiyaki Way.

While Mr Admassie claims that he risks defaulting on the Absa Bank loan, Deloitte & Touche holds that the loan is an evergreen facility with flexible repayment terms.

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