Absa to pay couple Sh234m for fraudulent shares sale


Absa bank on Muindi Mbingu Street in Nairobi. FILE PHOTO | LUCY WANJIRU | NMG

Absa Bank Kenya has been ordered to compensate a couple more than Sh234 million over the fraudulent sale of their shares in various companies including East African Breweries Plc (EABL) and BAT Kenya.

The judgment comes after a valuation report showed that as per the Nairobi Securities Exchange data, the current market value of the couple’s shares is Sh231,188,156.

The plaintiffs were also awarded interest and costs of the suit.

In deciding how to value the couple’s shares Justice Alfred Mabeya said the expectation of the plaintiffs when buying the shares was to benefit from the shares and the goodies including dividends, bonuses and interest that accompanied owning shares.

“The value given to shares is not only in the number of shares alone, but the whole intrinsic value carried by that one share. When the plaintiff came to court to seek justice for their shares, they did not only look at recovering the actual number of shares lost but those shares together with all the benefits that had been lost,” said the judge.

The plaintiffs were also awarded interest and costs of the suit.

In 1991, the couple — Stanley Mwangi Gachungu and Bilha Waruguru Mwangi — had used shares certificates in more than 10 firms to obtain loans from the lender with which they operated a current business account.

They signed blank transfer forms that they left under the custody of Absa Bank.

Upon fully repaying the loan the couple did not request the release of the share certificates as they had hoped to use the shares to secure more loans with the bank.

They revealed that they used to roast meat and purchased the shares as a plan for their retirement.

The court heard that they discovered in 1998 that they no longer received dividends from their shares only to discover that the shares had been sold despite them having fully repaid their loans to the lender.

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