Tycoon fights freeze of accounts in money laundering probe

James Samuel Kinyanjui, the business magnate who owns Geminia Insurance Company and the Sh2 billion Edenville Estate in Kiambu, has launched a multi-million shilling court battle to lift a police-backed freeze on his bank accounts.

Mr Kinyanjui has sued the Banking Fraud Investigation Unit (BFIU) for causing the freeze on his Diamond Trust Bank (DTB) accounts over his alleged involvement in money laundering and terrorism financing.

BFIU investigators asked DTB to limit Mr Kinyanjui’s transactions after spotting suspicious activity between the tycoon and an unnamed international crime syndicate. The restriction was to stand as investigators sought to determine the source of his vast financial muscle and the integrity of his business associates.

Mr Kinyanjui wants the court to restrain the BFIU from interfering with his bank accounts and issuing any directives to the bank over his deposits. He also wants the BFIU to compensate him for damages the blockage to his bank accounts have caused.

“I applied to my bankers for remittances by way of RTGS [Real-time gross settlement] when I was informed that the BFIU through a Mr Bruno were interested in knowing the reason and extent of the remittance and suspected that I was or may be involved in money laundering and criminal activities that include financing of terrorist activities,” Mr Kinyanjui says in court filings.

Attorney-General Githu Muigai and the Director of Public Prosecutions Keriako Tobiko have been enjoined in the suit as respondents in the case in which Mr Kinyanjui has expressed fear over his possible prosecution. None of the defendants in the suit have responded yet.

DTB has been forced to dishonour cheques Mr Kinyanjui has issued since it was asked to restrict the businessman’s transactions.

Mr Kinyanjui has attached correspondence between his lawyers and the BFIU as evidence in the suit but there is no indication of the parties he has been dealing with.

Mr Kinyanjui does not disclose how much money is in the DTB accounts, but says he has a massive empire built over 50 years that includes Geminia, Edenville and flower firm Torito Roses.

Besides, the businessman has interests in the manufacturing, pharmaceuticals, transport and airfreight industries.

Mr Kinyanjui reckons that he entered the business scene through a multibillion-shilling deal that saw him supply oil mining equipment to the Nigerian government in 1991.

Court papers say the equipment was supplied to the Nigeria National Petroleum Corporation and received payments in instalments over several years.
The total value of the deal is not known but Mr Kinyanjui says he received $20 million (Sh2 billion) payment from the Nigerian government in 1999.

The BFIU in September grilled Mr Kinyanjui who attended the sessions with his lawyer Kelvin Mogeni. The businessman has also recorded a statement with the BFIU.

Mr Kinyanjui insists that the BFIU’s investigations have been fuelled by malice as he was not given an opportunity to oppose the decision to restrict his bank transactions.

“I raised this matter initially with the respondents who have failed to either stop the harassment or undertake the necessary legal process as designed by law or discharge me. The result is my property worth millions of shillings have been frozen and is likely to result in untold suffering,” Mr Kinyanjui says.

Legitimate interests

The tycoon adds that he has other legitimate business interests in South Africa, Tanzania, Uganda and the Democratic Republic of Congo as well and that he has supplied several supporting documents to the BFIU.

Edenville Estate, Mr Kinyanjui’s multi-billion shilling property development project, has been one of the highlights of the real estate industry boom in the past three years. Phase One of the development consists of 345 housing units, most of them villas priced at between Sh14.5 million and Sh18.5 million. The Hass Consult report indicates they were sold out in a record 10 months.

Phase Two of the project comprises 454 maisonettes and was constructed at a total cost of about Sh2 billion.

Edenville is located about two kilometres from Kiambu Town in an area referred to as Turitu Farm. The project area is partially covered by coffee bushes and maize crop.

Plans have been in place to build a third phase of the estate on a 36.5-acre piece land. The total project land spans 149.5 acres.

Nairobi’s real estate boom has lasted more than 10 years, partly driven by rapid economic growth that has created a newly rich class of homebuyers.
Mr Kinyanjui reckons that he has been unable to meet the financial obligations of his other businesses and could face lawsuits from suppliers and creditors demanding payment for various goods and services.

He also wants the High Court to rule that he is entitled to damages for alleged harassment by the investigators. He has, however, left it to the court to determine how much he should be compensated.

“Mr Kinyanjui is an accomplished businessman and the acts of the respondents are likely to ruin his business empire. The petitioner therefore humbly prays for a declaration that as a consequence of the violation of his right to property, the petitioner is entitled to damages and upon inquiry an award be made,” Mr Kinyanjui’s petition reads.

He now says police have refused to respond to his queries on when he will be allowed to access his funds. Mr Kinyanjui reckons that the BFIU has shown bias against him and should not be allowed to continue its investigation into his affairs.

The businessman wrote to the BFIU on November 17 asking them to either charge him or allow him access to the DTB account, but he says the officers have since kept mum.