More investors sue collapsed Sasanet scheme for Sh11m

Three investors are seeking to recover Sh11 million from two collapsed pyramid schemes.

Bernard Kithinji, Grace Wangari of Dollar Mines Investment and Kenya Pipeline Company employee Samuel Maluki want the court to compel the directors of Sasanet Limited and Sasanet Investment Co-operative Society to refund the lost funds with interest backdated to July 2008.

The claimants allege in court papers that they entered into contracts with the two companies on promises of high monthly returns on the sums invested. Dollar Mines says it invested Sh2.8 million in the schemes after presentations by Sasanet directors Michael Chege and Sammy Gitau. It is seeking Sh6.8 million in compensation, inclusive of accrued interest.

The investors want the court to allow them to trace and recover assets owned by Sasanet directors and shares they have acquired in listed companies. They are also seeking an order directing the Nairobi Securities Exchange (NSE) to hold shares owned by the pyramid scheme directors as security for their investments.

Further, they want the bank accounts of the two directors in Dubai Bank, Co-operative Bank, Barclays Bank, Family Bank and Investments & Mortgages Bank frozen, pending the determination of the dispute.

Mr Maluki says on July 3, 2007, he invested Sh3.1 million in Sasanet and was to be repaid the principal and interest in instalments of Sh353,400 per month. He says he was entitled to Sh4.4 million after one year.

The suit comes in the wake of a recent ruling by Lady Justice Philemona Mwilu suspending a judgement that had awarded three Sasanet victims Sh20 million in a separate case. She said the award was made without serving the directors of Sasanet with summons to defend the suit.

Mr Chege and Mr Gitau argued that the verdict was reached in their absence. However, Godfrey Mwirigi, Mary Njeri and Mercy Kanyara maintained the directors were duly served but failed to appear in court.

The court issued a decree and certificate of costs compelling the directors to pay the claimants Sh20.4 million. The Sasanet directors submitted that the matter should have been determined by the Co-operative Tribunal or taken to an arbitrator.

Mr Mwirigi, Ms Njeri and Ms Kanyara had deposited Sh1.4 million, Sh8 million and 11 million respectively in both Sasanet Ltd and Sasanet Investments Co-operative Society.

Attorney-General Githu Muigai recently told Parliament that his office would set up a taskforce to help victims of pyramid schemes trace their lost billions and provide resources, including legal counsel to conduct independent efforts for the recovery.