How late Mombasa tycoon was defrauded of Sh10bn

Former Chief Kadhi Hamadi Kassim (left) chats with the late Tahir Sheikh Said at a past Lamu function. PHOTO | GIDEON MAUNDU
Former Chief Kadhi Hamadi Kassim (left) chats with the late Tahir Sheikh Said at a past Lamu function. PHOTO | GIDEON MAUNDU 

Two men were Thursday charged with defrauding the late Mombasa tycoon Tahir Sheikh Said, popularly known as TSS, of Sh10 billion.

Mr Zein Mohamed Ahmed and Mr Zahira Abbas Khaku denied the charges before senior principal magistrate Francis Kiambia.

The two, who are directors of KAAB Investments, were arrested by CID officers at their Mombasa offices on Wednesday and taken to Urban Police Headquarters for questioning.

KAAB Investments is owned by the late businessman’s brother-in-law Aweys Mohamed Ahmed. The duo is allegedly to have committed five major frauds on diverse dates between February 3 and 8, 2011, at the law firm of Cootow and Associates in Mombasa.

Among the companies that they defrauded were TSS Grain, Juja Coffee Exporters, TSS Investment, TSS Salt Manufactures, and Mvita Bottlers.

Mombasa Urban Directorate of Criminal Investigation (DCI) boss Jacob Kanake said the duo colluded to borrow money from banks using TSS’ companies’ documents.

“The directors of TSS group of companies decided to defraud the owner by taking loans and using the companies as collateral without endorsement (from the owner) and today our officers raided their offices and collected some documents belonging to TSS,” said Mr Kanake.

“They defrauded one company of Sh1.5 billion. We are at the initial stage of investigating and have called in Banking Fraud Investigation Department officers to assist us,” said Mr Kanake.

He said KCB GroupNIC Bank, Bank of Africa, National Bank and Imperial Bank are among lenders that had disbursed loans to TSS companies which subsequently failed to service the debts.

He said the two struck after the tycoon fell ill. Mr Kanake said the fraud had forced three companies to put up property for sale over non-payment of loans.

Last week, three banks put up more than 6,700 acres of TSS leasehold land holdings and other property on the Kenyan coast for sale.

The suspects, who were represented by lawyer Cliff Ombeta, were ordered to be detained at Central Police Station for three days to allow police to conclude investigations.

By the time Mr Said died early last month, his companies had defaulted on loans amounting to more than Sh3.5 billion.