Kenya Deposit Insurance Corporation (KDIC) has been restricted from selling or transferring properties belonging to former officials of Chase Bank, alleged to have been acquired using illicit proceeds from the collapsed lender.
High Court judge Alfred Mabeya put a freeze on the sale of the properties after ex-officials, including former chairman Zafrullah Khan, former managing director Duncan Kabui, former general manager of corporate assets James Mwaura and former general manager finance Makarios Agumbi, complained that KDIC had sold some properties to SBM Holdings and withheld information from them.
The former officials claimed what they were pursuing had dissipated due to the sale of the assets to a third party.
Justice Mabeya said that even though the properties were sold to SBM Bank, the claim by the former officials is still valid.
“The respondent cannot pass good title of the suit properties to a third party until after the rightful owner thereof is determined,” said the judge.
Mr Khan had submitted that the current tenants of the property declined to pay rent to them and were paying the money to an account with Equity Bank at the behest of KDCI.
He said in an affidavit that the consent orders they filed in court and extended on several occasions, did not bar them from managing the properties yet KDCI had mismanaged and left them waste.
“The plaintiff/respondent (KDIC) is hereby restricted from any further sale or transfer of the suit properties until the full and final determination of the instant suit,” said the judge.
Justice Mabeya, however, rejected a claim by the former Chase Bank (in liquidation) officials that they were coerced into signing the consent.
“There is nothing to show that the consent was obtained by fraud, collision, or under duress and coercion,” the judge said.
David Irungu, KDIC manager, opposed the application.
He said Mr Mwaura and Mr Agumbi authorised Sh7.5 billion in payments from the bank, which was used to purchase the properties registered in several firms as special purpose vehicles.
He said KDIC’s main claim is to compel Mr Khan and other persons named in the suit to transfer to it all assets acquired using the bank’s monies.
He said although KDIC had sold the SPV properties to SBM Bank Kenya, the sale did not affect the claim against the former officials as the transfer of the properties to SBM was only possible through registration of title yet they had failed to transfer them.
The assets, including shareholdings in several firms, prime property and luxury cars, are part of the Sh14.7 billion claim the bank has made on the ex-bosses in the ongoing suit.
The properties listed were mostly acquired by Rinascimento Global Limited, Nine Fifty Limited, The Lighthouse Property Company, Mathatani Limited and Friends Property Holdings Limited and Boulevard Properties Limited which were co-owned by Mr Khan, Mr Kabui, Mr Cheema and Mr Mavindu.
Editor's Note: This story has been revised to remove statement that said Anthony Gross, Ruth Muthoni and Seven Forty Investments have been listed as respondents in the suit. We have since established that the suit against them was discontinued on May 31, 2018. We take this earliest opportunity to apologise to Mr Gross and Ms Muthoni for any inconvenience or embarrassment that may have been occasioned to them by the error.
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