Trustees of the scheme said they were apprehensive of losing the amount after claims emerged that Stanlib intends to wind up its business in Kenya.
Justice David Majanja, however, stopped the proceedings to allow the dispute to be determined by an arbitrator in accordance with an agreement signed between the parties in 2015.
Moi University Pension Scheme has filed a suit seeking to compel Stanlib Kenya to deposit Sh120 million in court, accusing the investment manager of misadvising it to invest the amount in two banks that later collapsed.
In the case filed before the commercial division of the High Court, trustees of the scheme said they were apprehensive of losing the amount after claims emerged that Stanlib intends to wind up its business in Kenya.
Justice David Majanja, however, stopped the proceedings to allow the dispute to be determined by an arbitrator in accordance with an agreement signed between the parties in 2015.
The scheme said in the suit papers that Stanlib invested its Sh120 million imprudently and unprofessionally in the bonds of Chase Bank and Imperial Bank that collapsed and defaulted on bondholders.
Charles Nyamieno, the pension scheme’s manager said the investment manager is winding up its business in Kenya and it would be impossible for the scheme to recover the amount unless it is deposited in court as security, pending the determination of the dispute.
The investment manager invested Sh100 million and Sh20 million in Chase Bank and Imperial Bank respectively and both banks were placed under receivership by Central Bank of Kenya after they experienced liquidity problems.
When the scheme sought advice from the investment manager, Mr Nyamieno said Stanlib allegedly told it to consider the amount as bad debts and write them off.
He said Stanlib is winding up its business in Kenya and will be selling or transferring its business to ICEA Lion Asset Management (ILAM). The trustees were allegedly advised to transfer the scheme’s management of its funds to ILAM.
From the sale, Stanlib will get over Sh1.5 billion from ILAM, according to Mr Nyamieno.
“This suit has been brought by the plaintiff against the defendant in order to be indemnified by the defendant for the loss of Sh120,000,000 negligently and unprofessionally invested by the defendant in the collapsed banks,” he said.
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