Dyer & Blair gets nod to challenge Sh465m payment order

Dyer & Blair Investment Bank owner Jimnah Mbaru. PHOTO | FILE 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• Dyer & Blair told the Court of Appeal that the High Court had wrongly found it at fault over the four-year freeze of John Kiarie’s account as there was evidence of a Chief Magistrate’s order barring transactions on the former KCB director’s account.

Dyer & Blair Investment Bank has been allowed to challenge a High Court decision requiring it to pay former KCB director John Kung’u Kiarie Sh465 million he had invested in the Jimnah Mbaru-owned institution.

Dyer & Blair told the Court of Appeal that the High Court had wrongly found it at fault over the four-year freeze of Mr Kiarie’s account as there was evidence of a Chief Magistrate’s order barring transactions on the former KCB director’s account.

Dyer & Blair also holds that High Court judge Eric Ogola was wrong to rely on evidence provided by the investment bank’s former general manager and current National Bank chairman, Mohammed Hassan, who was not listed as a witness when the suit was filed.

Mr Kiarie sued Dyer & Blair and CFC Stanbic in 2009 claiming they colluded to shortchange him of a Sh91.5 million investment.

The former KCB director alleged that Dyer & Blair illegally froze his account to avoid investing his funds and that it acted in concert with CfC.

Mr Hassan, while testifying before the court, said that there was no court order freezing Mr Kiarie’s account as Dyer & Blair had claimed.

The Jimnah Mbaru-owned investment bank now says Mr Hassan was not a witness in the case hence the judge should never have entertained his testimony.

Dyer & Blair claims that banking fraud investigators were responsible for the freeze on Mr Kiarie’s account as they obtained an order from the Chief Magistrate’s Court to build a case against the former KCB director, who had in 2003 been charged with the theft of Sh129 million from three companies.

“The Central Bank of Kenya’s Banking Fraud Investigation Unit made the application for investigation and obtained the freezing order, a matter not challenged or contradicted before the learned judge,” Dyer & Blair says. Former Dyer & Blair general manager Mohammed Hassan admitted in court that he was the one who drew Mr Kiarie’s contract and that there was no freeze order issued.

Mr Kiarie was in 2003 charged with stealing Sh129 million from Ferro Metals Forwarders, Pharmaceutical Products Limited and Kenya United Steel Company. The case was, however, dismissed.

READ: Investor seeks Sh465m from broker, bank

Justice Ogola, in his judgment, held that Dyer & Blair took advantage of the criminal case against Mr Kiarie to freeze his accounts and to avoid investing his funds that would have grown substantially by now.

“The judge misdirected himself in law and in fact by not only relying on the purported evidence of Mohammed Hassan who was not a witness before the case, but further on purported statements made in criminal proceedings in which Dyer & Blair was not a party in contravention of the Evidence Act,” Mr Mbaru’s bank adds.

Mr Kiarie and CfC are yet to respond to the appeal.

The former KCB director had told the High Court that Dyer & Blair refused to give him a full statement of account after his deposits were unfrozen