Companies

EACC opposes Pattni firms Sh140m legal fees demand

PATTNI

Businessman Kamlesh Pattni. PHOTO | FILE

The anti-corruption watchdog has asked the High Court to stop two firms previously associated with billionaire businessman Kamlesh Pattni from demanding Sh140 million from it in legal costs incurred in a previous civil suit.

The Ethics and Anti-Corruption Commission (EACC) filed the application after Marshalls East Africa and Delphis Bank (now Oriental Commercial Bank) slapped it with a combined Sh140 million claim for legal fees the High Court ordered it to pay to the firms.

EACC moved to court in 2003 seeking to seize ownership of 14 firms it claimed Mr Pattni had bought from convicted fraudster Ketan Somaia with proceeds of the Goldenberg scandal.

The agency, however, holds that the suit was filed in the public interest, hence it should not be condemned to settle the legal costs.

The watchdog withdrew the suit in 2008 following negotiations with Mr Pattni and the government.

The two firms had told the High Court in an application that their legal bills were high because they had to protect their reputations. But EACC says the demand is too high considering the suit was only aimed at their shareholders.

“The suit was filed in the public interest to trace and recover property looted in the Goldenberg scandal. There was no allegation that Marshalls and Delphis themselves engaged in the rip off of public coffers. The reputation of the companies were not at stake,” says EACC.

Marshalls has in its response, however, defended its Sh60 million claim, arguing that it spent a lot of money filing suits that eventually led to the removal of receiver managers that the government and CBK had appointed to run it.

The court had granted temporary orders to the government allowing it to take over the 14 firms’ operations until the suit was concluded.

Delphis says the legal matters involved were complex, and that it spent a lot on filing volumes of documents hence its Sh80 million demand is warranted.

“It took a protracted battle and a plethora of applications to have the receiver appointed removed from the management of Marshalls. EACC ignored the fact that Mr Pattni and Mr Somaia did not own any shares in Marshalls and proceeded to make the outrageous claims against it,” says Marshalls.

Justice Joseph Sergon will rule on the matter on October 2.