Genghis Capital survives Sh10.8m liquidation bid

The High Court has dismissed a liquidation suit against investment firm Genghis Capital by a client whose money is held up in the collapsed Chase Bank.

Justice Mary Kasango ruled that King County Limited and Murithi Wanjau had invested their Sh10.8 million with a separate entity — Genghis Capital Unit Trust Fund.

The two had asked the court to liquidate Genghis Capital on grounds that the firm had failed to settle the cash, which was deposited in the collapsed bank, arguing that the stockbroker is insolvent.

But in its response, the investment bank denied any indebtedness, stating that it was just an agent that facilitated the company to invest in its Genghis Capital Unit Trust Fund and separate cash it helped deposit in an interest-earning account at Chase Bank.

“It is clear that the petitioners invested in sub-funds of collective investment scheme of Genghis Capital Unit Trust Fund, and not the company. It follows that the company cannot be liquidated on the basis of that investment,” ruled Justice Kasango

Unit Trust Fund

The judge noted that there is no connection between the cash invested in Unit Trust Fund and Genghis Capital.

The petitioners had told the court that the investment firm is indebted in the sum of Sh10.8 million and interest rate of 16.65 percent to the date of payment.

Genghis in its response said the Sh1.75 million was invested in Genghis Capital Trust Fund whose manager is British American Asset Managers and custodian is Chase Bank, now under receivership.

Genghis denied the allegations, saying the manager and custodian of the fund are obligated to account for the money.

The investment lender further argued that in November 2015 through its agency, Murithi Wanjau deposited Sh8.5 million in an interest-earning account at Chase Bank.

Genghis Capital says the cash was placed in the interest-earning account with the knowledge of the petitioner, and that it acted simply as the agent.

Genghis admitted receiving a demand letter from King County and Mr Wanjau but said that their cash could not be accessed since the custodian bank is under receivership and there is a moratorium.

Justice Kasango agreed with the position of Genghis Capital.