Companies

Chinese firm directors fail to stop trial in Sh4bn mall scam

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A construction worker does final touches at one of the walls of Lake Basin Mall in Kisumu in March 2019. PHOTO | TONNY OMONDI

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Summary

  • The High Court has dismissed a petition by directors of a Chinese company who sought to stop their trial over a scam involving the construction of the Sh4.1 billion Lake Basin Mall.
  • The judge further said the two would have their day in court and the claim they were making would be part of the defence.

The High Court has dismissed a petition by directors of a Chinese company who sought to stop their trial over a scam involving the construction of the Sh4.1 billion Lake Basin Mall in Kisumu.

Justice James Wakiaga dismissed the petition by Zeyun Yang and Zhang Jing, saying the two directors of Ederman Property Ltd failed to show how the Ethics and Anti-Corruption Commission (EACC) and the Director of Public Prosecutions violated their rights by charging them.

The judge further said the two would have their day in court and the claim they were making would be part of the defence.

Justice Wakiaga also said the trial magistrate would determine whether an offence was committed by the company and should the court find otherwise, then appropriate reliefs will be issued.

He further said it is the trial court that would determine whether the dispute was commercial and not civil.

The company and its directors moved to court seeking to quash their charges arguing that their prosecution violated their fundamental rights to due process, fair administrative action and the right to property.

The two directors have been charged with conspiring to defraud the public of billions of shillings in the construction of the mall at the lake-side city.

They are also accused of conferring a benefit by bribing members of the Lake Basin Development Authority to overlook the procurement process.

They argued that the government brought the trial to coerce them into dropping their claim for a balance of Sh645 million after completing the construction of the mall.

The EACC maintained that the company and board members violated various laws including procurement laws and the price was inflated to defraud taxpayers.

They termed their arrest as arbitrary as police raided their homes and confiscated their documents not related to the construction of the mall.

They said the action left their families traumatised, yet the contract has an arbitral clause for the settlement of disputes.