From left: Zulfikar Jessa, Nasir Jessa, James Kaburu and Naeem Shah in
court on March 23, 2015 where they were charged with conspiracy to steal
Sh29 billion through an irregular overdraft disbursement scheme at
Imperial Bank. PHOTO | FILE
By BRIAN WASUNA, bwasuna@ke.nationmedia.com
In Summary
Some of the high profile corporate and corruption
cases that kept the Judiciary busy in 2016 are expected to continue
making headlines this year.
The Judiciary is expected to conclude a number of trials
involving theft of public funds, while corporate fraud cases such as the
Dubai Bank and Imperial Bank collapses could take longer to resolve.
The High Court is expected to hear and determine
three cases filed by the Kenya Deposit Insurance Corporation (KDIC)
against shareholders and two former managers of collapsed Imperial Bank,
alongside a network of firms and businessmen who have been linked to
the looting of Sh44.7 billion from the lender.
The KDIC filed the cases before the commercial
division. The judicial review division of the High Court in November
ordered that Imperial Bank’s receiver manager engages shareholders and
depositors in talks regarding management of the lender.
Justice George Odunga also ordered the KDIC to
consider revival proposals by the shareholders who have placed
responsibility of the looting of depositors’ funds on deceased former
managing director Abdulmalek Janmohammed who died in October 2015 after
suffering a heart attack.
As Justices Olga Sewe, Fred Ochieng and Francis
Tuiyott look to determine the recovery suits involving Imperial Bank,
the Court of Appeal will be expected to determine the fate of another
collapsed lender — Dubai Bank.
Dubai Bank’s second-largest depositor Richardson
& David has objected to the KDIC’s move to wind up Dubai Bank and
pay off depositors.
The lender was placed under receivership in August 2015 and liquidation recommended two weeks later.
The Central Bank of Kenya (CBK) placed Dubai Bank
under receivership after finding that it was insolvent to the tune of
Sh1.3 billion, its loan portfolio stood at a staggering Sh4.1 billion
and the lender was in default of several banking laws. It only had three
directors on its board rather than the required five.
Dubai Bank was also cited for failing to honour
customer instructions to complete transactions totalling Sh41 million
and owed the Bank of Africa Sh48 million from a forex transaction.
The CBK officials have since been implicated in aiding top administrators of both lenders to conceal the scams.
The trial of 26 individuals implicated in the
looting of Sh791 million at the National Youth Service is also expected
to be concluded in 2017.
Businesspersons Ben Gethi and Josephine Kabura
headline the list of suspects that also includes suspended PS Peter
Mangiti, former NYS director Nelson Githinji, ex-NYS deputy director
Adan Gedow Harakhe and Devolution ministry administrator Hassan Noor
Hassan.
The suspects list also has Samuel Wachenje,
Hendrick Ntongesa Pilisi, Naftaly Githinji, Ruth Njeri Hihu, Charles
Onsase Nyaachi, Mary Wangui Mbuthia, Ezekiel Karanja Kamau and James
Gitau Kanuthu.
Others are Samuel Kilonzi, Fredrick Okello Nasiche,
Regina Nyambura Mungai, Philip Joshua Otinga, Jane Wangeci Gichuki,
David Dicks Alunga, Titus Libondo and Chemos Kororia Ndiema.
The courts will also this year be expected to determine
whether collapsed firm Kinangop Wind Park can auction off equipment that
was intended for use before the Sh15.5 billion project went up in
smoke.
Attorney-General has sued the firm, arguing that
the government still intends to carry on with the project, and wants
Kinangop Wind Park stopped from selling the turbines.
Kinangop Wind Park has also sued Kenya at the
International Chamber of Commerce seeking compensation for the botched
project which it argues failed owing to political reasons. Kenya’s
contract with the firm provided for compensation in the event of failure
attributed to political heat.
Audit firm Ernst & Young will also know its
fate regarding a move by the Capital Markets Authority to punish it for
alleged aiding of Uchumi executives in looting amounting to Sh1.9
billion.
The firm has sued the regulator for issuing notices
to show cause why its assets should not be attached to recover funds
lost as a result of its direct failure to ensure Uchumi’s accurate
financial standing did not reflect in audit reports.
The courts have also been asked to demystify the
ownership saga of a 20-acre piece of land that has been claimed by
Equity Bank CEO James Mwangi, businessman George Kiongera and the United
States International University-Africa (USIU-A).
All three parties have held that the original owner
was former President Daniel arap Moi. Mr Moi, however, claims he only
recognises the sale to Dr Kiongera.
The saga has sucked in the author of the Ndung’u
land report — lawyer Paul Ndung’u — who Dr Kiongera has now accused of
professional misconduct.
Dr Kiongera says the lawyer failed to disclose that
he was a shareholder in DPS International — a firm that claims to have
bought the land from Mr Moi before selling it to ICEA which in turn
offloaded the property to USIU-A.
Former City Hall chief finance officer Jimmy Mutuku
Kiamba will also learn his fate as a petition he filed to stop further
investigations by the Ethics and Anti-Corruption Commission (EACC) and
the Kenya Revenue Authority.
Mr Kiamba is under investigation by the EACC for
allegedly looting Sh400 million between January and November 2014. The
former City Hall official was earning a salary of Sh85,000 when he
acquired the Sh400 million according to the EACC.
Mr Kiamba was also cited for failing to disclose
several assets comprising his estate. He, however, now claims that the
EACC is hounding him unlawfully and wants the agency barred from any
further investigations.
Chief Justice David Maraga has promised to speed up
cases and to digitise court proceedings. The CJ faces an uphill task
as there still stands a backlog of 500,000 cases. His predecessor Willy
Mutunga managed to ease the backlog which stood at 900,000 in 2011
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