In a landmark ruling, the Employment and Labour Relations Court in Kenya awarded KES 98 million to Ronald Otieno Mahondo, the former General Manager of Little Cab, for unfair dismissal and failure to honor a promised equity stake.
Mahondo joined Little Cab in April 2016 with a starting salary of KES 240,000, later increased to KES 340,000. The most important part of his compensation was a 1% equity stake in the company, with an additional 1% tied to performance.
He told the court that despite delivering on his targets, the company, owned by Craft Silicon, and its CEO Kamal Budhabhatti, failed to honor the agreement.
As first reported by Kenyan Wall Street, the dispute came to light after Mahondo presented a secret audio recording in which Budhabhatti acknowledged the 1% shareholding promise.
The court found the recording “credible, consistent, and verifiable” under Kenya’s Evidence Act. Justice Mathews Nduma, who presided over the case, said in his ruling: “The claimant was victimized in an effort to conceal the fact that he had been awarded 1% shareholding.”
The judgment detailed that Mahondo’s dismissal in May 2017 was orchestrated to deny him his equity. According to the court, the company issued a “litany of adverse letters” and disciplinary warnings in a short period, describing the process as a “pretext for his removal.” It concluded that the dismissal was neither fair nor lawful.
On valuation, the court adopted an estimated company value of USD 75 million, pegging Mahondo’s 1% stake at USD 750 000, equivalent to about KES 97 million.
An additional KES 1.02 million was awarded for unfair termination, bringing the total to roughly KES 98 million, one of the largest compensation awards in Kenya’s employment law history.
Justice Nduma stated that employers must uphold the integrity of employment contracts, especially where equity is part of agreed remuneration.
The ruling reinforces the enforceability of equity-based compensation in Kenya’s tech and startup ecosystem, where such arrangements are increasingly common.
It also showcases how informal agreements, if substantiated by credible evidence, can hold significant legal weight in employment disputes.
