KCB gets order to complete sale of Devani’s assets

The High Court has allowed KCB to complete the ongoing sale of fugitive businessman Yagnesh Devani’s assets, stopping a bid by the run-away tycoon to freeze pending transfers at the lands registry.

Justice Eric Ogola, however, restrained KCB from initiating any fresh sale of the businessman’s property until a ruling is made on an application by Mr Devani’s oil-dealing company, Triton, which wants the sales stopped.

KCB last week told the High Court that it has completed the sale of all of Mr Devani’s assets used to secure a Sh2.1 billion loan.

The court, however, on July 17 gave an order restraining sale of the assets; prompting KCB to return to court seeking a clarification on how the transfer and registration of already sold properties could be handled.

“The court order of July 17 was clear. It was not intended to affect or bar the third parties (who have purchased the assets). I grant prayer 2 (of KCB application) pending ruling of September 26, 2014,” ordered Justice Ogola.

KCB says 14 properties pledged by Mr Devani as security for the loan had already been sold by the time order freezing fresh sales was issued.

The bank argued that the buyers of the properties are not party to the suit and the court cannot issue an order that restrains them from registering the transfer of titles at the Lands registry.

But Triton asked the judge to decline the application, arguing that it has already registered the July 17 order against the titles stopping anyone from registering a transfer of ownership.

Triton was placed under receivership in 2008 after it was established that the company had withdrawn its stock of fuel from the Kenya Pipeline Company’s storage tanks without informing its financiers – who included KCB and PTA banks – after which Mr Devani fled the country leaving behind a Sh7.6 billion scam.

READ: KCB, pipeline firm in battle for control of Triton’s assets

Triton had sought an injunction against the sale of assets by KCB on the grounds that the loan was borrowed at a personal level by Mr Devani.
Triton had moved to court in December seeking to block KCB and PTA banks from auctioning its assets.

Last week, Triton argued that it had evidence that the lender was in a rush to complete the sale and asked for an order restraining the auction, arguing that its case would be rendered irrelevant.

Triton has distanced itself from an agreement in 2009 in which its assets were pledged as security for the loan taken by Mr Devani, a former director of the oil trading company.

The fugitive businessman was arrested in London in 2011 and he has been fighting to stop his extradition to Kenya to face charges related to the scam.

Triton had claimed that KCB and PTA banks are seeking to sell 15 petrol stations and six undeveloped plots owned by the oil firm.

The company claims that the deeds securing its assets were signed by Mr Devani, Sunil Somaia and Mahendra Pathak without seeking approval from its directors, making the agreement null and void.