Mweni withdraws statement alleging Sh2.6bn bonds theft

CMA chairman Kung’u Gatabaki. The markets regulator blacklisted Mr Mweni on December 21 last year. FILE  Nation Media Group

By GALGALLO FAYO

Posted  Thursday, June 6  2013 at  18:58

In Summary

• Justice Weldon Korir on Thursday allowed Mr Mweni’s application to withdraw the ‘further affidavit’ and file amended documents in the next two weeks.
• CMA blacklisted Mr Mweni on December 21 last year on grounds that he was blocking investigations into a multi-billion-shilling bonds trading scam.

Blacklisted bonds dealer Fredrick Mweni has withdrawn a sworn statement filed at High Court in which he claimed the Treasury may have lost up to Sh2.6 billion through theft of bonds from the Central Bank.

Justice Weldon Korir on Thursday allowed Mr Mweni’s application to withdraw the ‘further affidavit’ and file amended documents in the next two weeks.

Mr Mweni filed the document in support of a case in which he is challenging the decision by the Capital Markets Authority (CMA) suspending him from holding directorship in any listed company.

“Applicant allowed to withdraw the further affidavit sworn on April 29, 2013 and filed on May 3, 2013. The applicant is granted leave to file amended further affidavit on the respondents and the intended interested party within 14 days,” ruled Justice Korir.

Mweni’s lawyer, George Kithi, said the amended affidavit will have more evidence and reveal more information on the theft allegations.

“We will file another affidavit which will be more detailed,” said Mr Kithi.

CMA blacklisted Mr Mweni, a former managing director of Tsavo Securities, on December 21 last year on grounds that he was blocking investigations into a multi-billion-shilling bonds trading scam.

Mr Mweni was entangled in the bonds trading scandal for his alleged involvement in trading of three bonds worth Sh18.5 million, Sh9.5 million and Sh11.5 million.

But the trader claims that in suspending him, while leaving all the other brokers and investors involved in the scandal to continue operating, CMA’s actions were discriminatory against him.

The Central Bank of Kenya (CBK) have since applied to be enjoined in the case as interested party saying that the allegations, if not challenged and responded to, can damage its reputation irreparably.

CBK termed as “serious and spurious” allegations that its staff stole Treasury bonds worth Sh2.6 billion.

Mr Mweni is entangled in a web of cases emanating from the alleged bonds theft. Two cases he has filed against the regulators are pending before the High Court. The third case is before the magistrate’s court and involves his brother, Bokole Mweni, who is facing a criminal charge.

The list of brokers and investors named in the withdrawn document to have handled the fake bonds includes Kestrel Capital, Apex Africa Capital, Kingdom Securities and Afrika Investment Bank.

The documents show Kestrel handled bonds on behalf of Tsavo Securities while the other three firms handled bonds on behalf of Manline Communications, which is accused of involvement in the sale of separate Sh105 million worth of fake bonds.

A director of Manline communications is facing criminal charges at the magistrate’s court alongside Bokole Mweni and Moses Muregi. Mr Muregi, a Central Bank employee, is accused of creating the fake bonds.