Nyachae firm told to release papers in PC widows' case

A judge has ordered a law firm associated with Charles Nyachae to submit an account of money due to the estate of the late former provincial commissioner Daudi Luka Galgalo.

Mr Nyachae is the chairman of the Commission for the Implementation of the Constitution (CIC).

Mr Justice Muga Apondi said there was no good reason why Nyachae and Company Advocates should not provide the account for the Sh80 million realised from the sale of four parcels of land belonging to Manyagalo Ltd, a company that his father, former Cabinet minister Simeon Nyachae, co-owned with Mr Galgalo and former permanent secretary James Stanley Mathenge.

“This court is of the considered opinion that Charles Nyachae T/A Nyachae and Company Advocates should give a full account of what was received after the sale of the four parcels of land,” ruled Mr Justice Apondi.

The widows of Mr Galgalo — Grace Dimitu and Ruth Rufo — who are the administrators of the estate, moved to court five years ago seeking orders to compel the younger Nyachae to submit the account for the money due to the family in regard to Mr Galgalo’s shareholding in the company.

They told the court that when the company’s assets were sold, each shareholder was entitled to Sh24.5 million together with accruing interest.  On January 21, 2005 the law firm wrote to the Galgalo family and confirmed that Sh17 million was due to them.

Thereafter, Sh10 million was paid to the estate administrators, leaving a balance of Sh7 million. Consequently, Sh5 million was deposited in a joint earning account but funds were later released to the family.

The court was further informed that from February 2005 to May 2008, Sh7.2 million was due to the Galgalos as interest and urged the judge to order the law firm to release the money to them.

But while opposing the application, Mr Nyachae submitted that the obligation of his law firm was solely to Manyagalo Ltd arguing that the Sh80 million proceeds from the sale of the parcels of land were distributed to the shareholders.

The lawyer said he never dealt with the issue of dividends of the shareholders and the law firm was also not in a position to render any accounts since there was no advocate/client relation between him and the widows. He urged the court to reject the application.

But in his ruling, the judge said that Galgalo, Nyachae and Mathenge were the only shareholders of Manyagalo Ltd with equal stakes in the company.

“The three were at one point senior public officers in the civil service and long time bosom friends, which friendship developed and extended to their families,” observed Mr Justice Apondi. He also said there was a great deal of trust, confidence and mutual respect between them and all the members of their families.

However, after the death of Galgalo, the other directors resolved to sell the assets of the company and distribute the proceeds by way of dividends to the shareholders.

Mr Simeon Nyachae is one of the surviving three former powerful administrators.