Chinese contractor to deposit Sh31m in tiff over mining site

A Chinese construction company has been ordered to deposit Sh31 million in an income-earning bank account pending the resolution of a dispute with a Kenyan firm that helped it unlock a stalemate with residents over a mining site.

Stecol Corporation was directed by High Court judge Alfred Mabeya to deposit the amount after observing that it was the sum claimed by Enzyne Creations Ltd when it negotiated a deal on behalf of the Chinese firm on mining at Katani Quarry in Machakos.

The amount is, however, far below the Sh326 million that was being sought by Enzyne. It is also a win for the Chinese company after the court ordered the lifting of an order freezing its accounts after making the deposit.

The Chinese firm had claimed the freeze of its bank account had paralysed its operations and it was unable to fund the ongoing construction projects, pay salaries, meet daily operational costs, payments to service providers, and taxes.

“The court, therefore, is of the opinion that the respondent is not a flight risk as it is based in Kenya and is carrying on various projects worth a lot of money,” the judge said.

Enzyne claimed in court documents that it helped negotiate and create a good relationship between the firm and residents following a standoff over mining at the quarry.

The firm’s managing director Evans Obae said he helped the Chinese company resume operations at the quarry only to close it down and was planning to move out of the country. He claimed he secured funding as he tried to unlock the standoff.

Mr Obae said the closure of the quarry had affected his work and being a Chinese company, Stecol could be winding up its business in Kenya and it would only be fair to freeze its bank accounts.

Mr Kun Guo, the Chinese firm project manager, denied it was leaving Kenya, saying it was undertaking several major road construction projects within the country, including one worth Sh1.7 billion that would last two years.

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