Freeze order on contested accounts in BAAM, Acorn suit extended

Corporate News

Edwin Dande, CEO of Cytonn Investments PHOTO | FILE  NATION MEDIA GROUP

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• Justice David Onyancha on Thursday argued that failure to extend the orders may lead to transfer of the cash, which could render Britam’s suits against the property developer useless.

The High Court has ordered that bank accounts opened by companies jointly owned by British American Asset Managers (BAAM) and real estate developer Acorn remain frozen until an ongoing legal battle between the firms is determined.

Justice David Onyancha, while extending the freeze orders on the bank accounts and several properties held by the developer, Thursday argued that failure to extend the orders may lead to transfer of the cash, which could render BAAM's suits against the property developer useless.

The judge further held that the court has the power to extend the temporary injunctions on the accounts and properties beyond the initial 14 days granted.

“This court will preserve the subject matter (funds and land parcels) in any way. The orders are extended until the matter is heard and determined. Failure to extend the orders will lead to the transfer of the funds which will lead to the destruction of the case,” Justice Onyancha ruled.

Britam, through its subsidiary BAAM, has accused four former employees of illegally transferring Sh3.9 billion from its accounts to Acorn’s, a related company in which it has a 25 per cent stake.

The former Britam executives; Edwin Dande, Shiv Arora, Elizabeth Nkukuu and Patricia Wanjama, have also been accused of transferring a number of properties located in Nairobi, Machakos and Kajiado to the developer.

The alleged illegal transfers were done prior to their resignation from the investment firm, after which they formed another private equity fund—Cytonn.

READ: High Court stops arrest of former Britam staff

Britam is pursuing the four Cytonn executives for the alleged transfer, and has accused Acorn of accepting funds that were acquired illegally.

The four executives have denied the allegations and claim that the move is a cleverly orchestrated plan aimed at sparking a takeover of Acorn.

Britam owns a quarter of Acorn’s shares. Justice Onyancha ordered the parties to appear before him on Monday to take further directions. Britam filed five suits against Cytonn and Acorn.

The ruling came as Mr Dande asked Britam to produce evidence of the audit it claims revealed the alleged illegal transfer of its funds by the former managers.

The assertion was made in response to one of the suits in which Britam has sued developers Crescent, Valley Front, Spring Green, Mikado and Spring Green alongside Acorn and the four Cytonn executives.

Mr Dande says the internal audit referred to by BAAM acting CEO Jude Anyiko has only been mentioned in the suit papers, but no evidence has been presented in court to verify that it was conducted.

He insists that Britam was aware of a partnership with Acorn, and that its top level officials approved the transfer of the funds to the property developer.