Foreigner, three Kenyans fight over unfrozen Sh2.3 billion

gavel-money
gavel-money

Three Kenyans are locked in a court battle with a woman from the Southeast Asian nation of Laos over Sh2.3 billion held in Ecobank accounts after the State withdrew a petition that had frozen the cash on money laundering fears.

The three Kenyans -- Stephen Maina Njenga, Felix Rantu Lekishe and Solomon Joseph Maina -- have obtained a court order blocking Ecobank from releasing the money held in three bank accounts to KiwiPay PTE Ltd and Monthida Rashi, a Laotian.

The Kenyans obtained the freeze order in the middle of talks with the Assets Recovery Agency (ARA), which agreed to drop the push to have the billions seized and forfeited to the government.

ARA had suspected that the company was involved in credit or debit card fraud and may be part of an international syndicate.

The State agency alleged that the firm was involved in an intricate money laundering scheme to hide the source of illicit funds.

But shareholders of KiwiPay Kenya started fighting over ownership of the firm and a share of the Sh2.3 billion after the State showed willingness to drop the suit.

The Kenyans claim that they have been dropped as directors and shareholders of the KiwiPay Kenya Ltd and now want to be bought out, if the parent company- KiwiPay PTE Ltd— no longer wants them as owners of the firm. Kiwipay PTE is yet to respond to the suit and inform the court how the Kenyans became shareholders and were later dropped as owners.

“The 1st (KiwiPay PTE) and 2nd (Ms Rashi) Respondents be and are hereby directed to buy out Petitioners from the 4th Respondent [KiwiPay Kenya], if the 1st and 2nd Respondents are desirous of remaining the sole shareholders of the 4th Respondent,” Mr Njenga says in an affidavit.

The parent company is based in Singapore and claims to deal with digital payment services such as QR Code solutions for retail shops, hotels and restaurants. It enables foreign e-wallet solutions such as Alipay, SamsungPay, ApplePay, WeChatPay and more.

The Attorney-General had earlier informed the court of suspicions that the company was involved in credit or debit card fraud and part of an international syndicate.

Kenya has in recent years become a hotbed of suspicious transactions by foreigners conspiring with locals, pointing to weak anti-money laundering laws and lapses.

This triggered a string of applications from ARA to freeze and forfeit billions to the government, but the agency has in recent days been withdrawing petitions seeking seizure of the funds wired to Kenya from Asia, Middle East and West Africa.

When KiwiPay Kenya was registered on June 3, 2020, Ms Rashi and the three Kenyans were listed as shareholders.

Mr Maina, Mr Lekishe and Mr Karimoni each held 2,900 shares equivalent to a 7.3 percent stake while Ms Rashi had 8,000 or a 20 percent stake. KiwiPay PTE owned a 58.3 percent stake, making it the largest shareholder. But the Kenyans were later replaced on September 15 and ownership transferred to Ms Rashi, growing her stake to 41.7 percent.

The company also enlisted Victor Ngure Githua, who holds zero shares, as a director.

The anti-corruption court yesterday adopted the consent between KiwiPay and ARA that formally lifted the freeze of the Sh2.3 billion held in the three accounts at Ecobank. The reasons behind the consent were not made public.

The release of the billions, however, will have to wait for the outcome of a petition filed by the three Kenyans at the Commercial Division of the High Court. This is after Justice David Majanja blocked Ecobank from releasing the $19.48 million (Sh2.3 billion) in the bank accounts at Muthangari Branch, pending the determination of the petition.

Mr Njenga said that a man holding a French passport and identified as Gregory Schmidt has been transacting in the three bank accounts yet they are the only signatories and has transferred up to $17 million (Sh2 billion) from the company in Kenya and wired it to a bank account in Singapore.

The transactions were done through Internet banking between October last year and March 9, 2022, court documents show.

“In the circumstances, our clients hereby declare a dispute against you, Gregory Smith and Monthida Rashi, on account of misuse of the company’s Internet banking credentials and irregular and unauthorised withdrawal of money from the company’s accounts,” the petition states.

The Kenyans say their sudden removal as directors and shareholders is unlawful because the process for their ouster was not followed as required under the Companies Act.

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