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CAMEROONIAN ACCUSED OF DEFRAUDING IRANIAN OF MILLIONS IN FAKE COFFEE SUPPLY.

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Cameroon businessman Fritz Bwangai Sah before Milimani Chief Magistrate courts in Nairobi where he denied defrauding Sh19. 5 million. /PHOTO BY IRENE ONYANGO.

BY IRENE ONYANGO.

A Cameroon businessman has been charged with obtaining Sh19.5Million while pretending to be in a position to supply goods from Kenya to Iran.

Fritz Bwangai Sah was arraigned before Milimani Chief Magistrate Lukas Onyina and denied the charges preferred against him.

On the first count, Bwangai falsely pretended that he was in a position to supply 57,000 mega tonnes of green coffee beans from Kenya to Iran.

It is alleged that he committed the offence on diverse dates between May 1, 2023 and January 30, 2024, at an unknown place jointly with others not before court. The charge sheet stated that he committed the offence with intent to defraud obtained Sh19,500,000 from Mahdi Afsharpanah.

He is further charged with conspiracy to defraud Mahdi of the money by pretending that he would supply the green coffee beans.

While opposing bond, the Prosecution told the court that the accused person is a flight risk since he has been on the run since June 2023 after discovering that he was wanted by the police.

Additionally, the prosecution told the court that Bwangai is a frequent traveller according to his passport and that he was unlikely to show up in court, if freed on bond.

The prosecutor urged the court to withhold the accused passport and get a Kenyan surety, if inclined to release him on bond.

His lawyer however opposed the application by the prosecution stating that the accused person was arrested at his residence Kileleshwa on March 22.

The lawyer stated that the Bwangai owns businesses here in Kenya and despite his travel histrory, will always come back to Kenya having lived in the country for almost 8 years.

The matter will be mentioned on 27th for confirmation of Pre bail report.

DJ MFALME, SIX OTHERS AMONG THEM POLICE OFFICERS TO REMAIN IN CUSTODY AS POLICE PROBE THE DEATH DEPUTY DCIO OFFICER.

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Joseph Mwenda popularly known as DJ Joe Mfalme with other suspects before Kibera Magistrate Court./PHOTO BY S.A.N.

BY SAM ALFAN.

Detectives probing the death of Dagoretti Deputy DCIO Inspector Felix Kintosi have been allowed to detain seven people among them a popular DJ and three police officers.

A Kibera court allowed the application by the investigating officer to detain Allan Ochieng, Eric Gathua, Simon Wanjiru and Joseph Mwenda also known as DJ Joe Mfalme.

Also to remain behind bars as detectives complete the probe as Khadija Abdi Wako, Sammy Rotich and Agnes Mogoi, who are police officers attached to Kikuyu Police station.

DJ Joe Mfalme will be detained at Kabete Police Station, Allan Ochieng, Eric Kariuki Gathua, and Simon Wambugu Wanjiru at Muthangari Police Station, while Khadija Abdi Wako, Sammy Cheruyot Rotich and Agnes Kerubo Mogoi who are police officers, will be detained at Riruta Police Station.

This matter will be mentioned on 8th of April for further directions.

The court heard that preliminary investigations revealed that Kintosi had been involved in a slight non-injury accident while driving his Subaru forester KBM 233J, near Kikuyu police station.

The officer’s vehicle was involved in the slight accident with KDK 788N which had five occupants including the DJ.

An altercation ensued and Kintosi was beaten and Khadija, a traffic police officer responded and took him to Kikuyu police station.

But as he was being taken away, Kintosi allegedly complained of abdominal pain and that he was passing blood as he urinated.

At the desk were Rotich and Agnes who later released him.

His situation worsened and was rushed to Nairobi West Hospital where he was admitted.

He died on March 21, 2024.

The investigator told the court there is a very high likelihood that the suspects would interfere with investigations, if released on bond.

“It is fair and just for this Court to grant the orders prayed so that the investigating officer may gather sufficient evidence on this matter including recording relevant witnesses statements, obtain treatment record from the hospital, obtain CCTV footage of the crime scene, call data records of the respondents, arrest of another suspect who is still at large, take the respondents to Mama Lucy Hospital for mental assessment and forward investigation file to Director of Public Prosecution, “, IO told the court. 

The court informed that although seven people had been arrested, one was still at large.

Then investigating officer added that he was yet to record statements from potential witnesses, obtain CCTV footage from the scene among other evidence.

A COUPLE LOSSES TWO VEHICLES LINKED TO PROCEEDS OF CRIME.

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High Court Anti-Corruption Division Judge Esther Maina who has ordered Ruiru couple to surrender their two motor vehicle to the state.

BY SAM ALFAN.

A Ruiru couple has forfeited two motor vehicles to the government after a judge found that it was linked to proceeds of crime.

High Court Anti-Corruption Division Judge Esther Maina directed the motor vehicle KCP 336B and KDC 813M taken over by the State after ruling that they were proceeds of crime and trafficking in persons.

The couple Elosy Kendi Mutwiri and Felix Mutwiri Muthama had secured loans from Situ Investments limited and NCBA Bank.

“Accordingly, I find that the two vehicles are liable for forfeiture to the government of Kenya and I do sold,” ruled the judge in her decision.

The judge dismissed claims by Situ Investments ltd and NCBA Bank that they were the current owners of the motor vehicles after the couple defaulted in repaying loan.

The company has claimed that it shall suffer greater prejudice if the security it hold is forfeited as it will be left financially exposed.

NCBA Bank on its part argued the car was bought through a loan advanced by virtue of loan agreement.

Th judge said she was persuaded that that the loans borrowed from the two financial institutions were just decoys intended to conceal and disguise the source of funds used to acquire the two motor vehicles.

The judge said it is evident that after taking loans and acquiring the cars, which they then used as collateral, the couple used the monies which they acquired through the illegal trade to service those loans.

“That clearly explains why they were arrested they could no longer service the loans,” said the judge.

She added, “In effect the vehicles were acquired through the proceeds of illegal trade or business and the loans were used to launder the property to make it look like it was from a legitimate course.”

The judge further said that lenders must take cognizance of such and take precautions to cushion themselves from customers such as Elosy who use their facilities to launder their ill-gotten properties.

Asset Recovery Agency moved to court seeking the forfeiture of the vehicles stating that they were linked to proceeds derived from trafficking in persons.

FORMER ADMINISTRATOR FINALLY PLEADS TO CHARGES OF CONSPIRACY TO DEFRAUD.

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former Nairobi Provincial commissioner Davis Nathan Chelogoi before court. /PHOTO BY S.A.N.

BY SAM ALFAN.

Former Nairobi Provincial commissioner Davis Nathan Chelogoi has finally been charged with fraud after being on the run for months.

Chelegoi appeared before a Nairobi court and denied several counts relating to a Sh1.3 billion parcel of land in Lower Kabete.

The former provincial administrator will remain in prison pending a ruling by Milimani Magistrate Dolphina Alego on his bail application.Among the charges he faced were conspiracy to defraud a businessman of land valued at Sh1.3 billion in lower Kabete.

Chelegoi and an assistant Deputy Director Land Administration Officer in the ministry of Lands and Physical Planning Andrew Aseri Kirungu are accused of jointly with others not before court, conspiring to defraud Ashok Rupshi Shah and Hitenkumar Amritlal Raja of a parcel of land.

They allegedly committed the offence on or before the 9th day of December, 2020..

The and Reference No.18485 I.R. No.64011/1 measuring approximate area 7.390 hectares situated along Lower Kabete road valued at Sh1.3 billion.

The two are also accused of jointly and unlawfully procuring registration of a parcel of land with intent to defraud.

Chelogoi has failed to appear in court on several occasions forcing the magistrate to issue a warrant for his arrest.

Last week, the court visited tried without success to access the Nairobi Hospital, where he was admitted, for purposes of plea taking. The court was denied access to the facility.

The charge sheets state that they committed the offence 9th day of December, 2020 and 4th June, 2021 at the State Department of Lands and Physical Planning within Nairobi City..

According to the charge sheet, Chelogoi falsely pretended to be the lawful and the registered owner of the said Land.

Kirungu was accused of abusing his office by causing fraudulent Certificate of Title L.R. No. 18485 1.R. No.232908, an act that was prejudicial to the rights of Ashok.

It is alleged that he made the fraudulent act on diverse dates between the 9th December 2020 and 26th May, 2021 at the State Department of Lands and Physical Planning within Nairobi City County.

The duo are jointly accused of fraudulently procuring an allotment Ref. No. 75707/VII dated 31st January, 1995 for Land Reference No. 18485 Inland Register (I.R.) No.64011/1 purporting it to be a genuine and valid letter of allotment issued by the Commissioner of Lands.

JUDICIARY REJECTS PROPOSAL TO MERGE SPECIALISED COURTS WITH HIGH COURT.

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Chief Justice Martha Koome during Annual Conference of Judges of the Employment and Labour Relations Court.

BY SAM ALFAN.

The Judiciary has opposed plans to merge the Employment and Labour Relations court and Environment and Land Court with the High Court.

Chief Justice Martha Koome said the Judiciary has written to the leadership of Parliament.

The Chief Justice contends that there was informed reasoning that prompted Kenyans to demand for specialised courts to handle employment and labour relations, and also environment and land matters.

“The contribution by the two courts to expeditious delivery of justice and a robust jurisprudence in these areas of special concern to Kenyans justify the continued existence of the specialised courts,” CJ Koome told the Annual Conference of Judges of the Employment and Labour Relations Court on Thursday.

The CJ further revealed that the ELRC registered a case clearance rate of 166 per cent in the first half of the 2023/2024 Financial Year after resolving 3,414 cases.

“However, the challenge of backlog remains a pressing concern. With a considerable number of cases pending beyond a year, our shared goal must be to intensify efforts to reduce this backlog, ensuring timely justice for all parties involved. As at the end of December 2023, the Court had 9,362 pending cases,” she highlighted.

She indicated that out of these pending cases, 7,837 matters have been in court for more than one year, which means they fall within the Judiciary’s definition of case backlog.

The CJ observed that the rate of adjournments reduced from 3 per cent that was recorded the previous financial year, to an adjournment rate of 2 per cent of scheduled cases during the first half of this Financial Year. “This reduction signifies a commitment to expediting the judicial process, further enhancing the court’s efficiency.”

She noted that the court’s jurisprudence has contributed to the social transformation envisioned by the Constitution by addressing contemporary issues at the work place but also setting a benchmark for social justice.

“From upholding the rights of marginalized and vulnerable groups to ensuring workplace safety, the court has made significant contributions that resonate with the social justice aspirations of our Constitution,” she opined.

She singled out landmark judgments in areas such as unfair dismissal, collective bargaining, occupational safety, and the resolution of disputes arising from economic restructuring receiving critical commentary and citation by scholars within and outside Kenya.

WHY AHMEDNASIR IS SEEKING SH200 MILLION DAMAGES FROM SUPREME COURT.

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Senior Counsel Ahmednasir Abdullahi ./PHOTO BY S.A.N.

BY SAM ALFAN.

Senior Counsel Ahmednasir Abdullahi has sued the Supreme Court of Kenya demanding Sh200 million for damages after the top court imposed an indefinite ban against him and his associates.

In a case filed before the East African Court of Justice, the outspoken lawyer wants to be paid Sh200 million for damages from the cases he had to drop after the court denied him audience.

It is his argument that the top court infringed on his universally accepted right to fair administrative action and right to access justice and fair trial.

He wants the regional court to direct the state to reverse the pronouncement made by the apex court on 18th January banning him and his law firm from appearing before the court.

“The action taken by the Supreme Court to ban me from practicing before it, is not an outcome of a judicial inquiry by the Supreme Court of Kenya in exercise of Fits jurisdiction as set out under Article 163 of the Constitution of the Respondent State or the Supreme Court Act, 2011 in that no contempt proceedings contemplated under Rule 57(4) of the Supreme Court Rules, 2020 were initiated by the Justices of the Supreme Court nor was the Petitioner ever notified of the intention to institute any contempt proceedings against me, ” he adds.

The lawyer was banned for post he has been generating against the Supreme Court, its leadership and membership over the years.

He wants the East African Court of Justice to declare that the state acting through the acts and omissions of its, judicial organs especially the Supreme Court violated its commitment to the fundamental and operational principles of East Africa Community in particular the principles of good governance, democracy, transparency, accountability, the rule of law and protection of human rights guaranteed under Articles 6(d) and 7(2) of EAC Treaty.

The Registrar of the Supreme Court Letizia Wachira wrote to him on January 18, allegedly on the instructions of the Judges of the court informing him of the ban.

He adds that move by Apex court to ban him from practicing before it for an unspecified period, amounts to an arbitrary action that is not anchored in any provision of formal law that regulates the practice of law in Kenya which must be accessible and precise and must comply with substantive requirements imposed by the rule of law and the principle of legality.

He further adds that the decision of Supreme Court which was arrived at by only some of, not all of the Judges of the court following an exchange of messages on WhatsApp between them, is so extreme and points to the existence of a mindset.

“That it is manifestly lacking in fairness and impartiality towards me in that the Justices of the Supreme Court did not apply any law before making the pronouncement contained in the letter dated 18 January 2024 whose effect is to violate my right to work and to gain my living by work which I have freely,” he said in an affidavit.

He adds that the Justices of the Supreme Court bend the law on scandalising the court in such a manner as to achieve the desired outcome of censoring him from airing dirty judicial laundry in public.

“I believe that Supreme Court manipulated the law on contempt of court in order to achieve a result that favored impunity and limited my freedom of expression in that the Justices of the Supreme Court do not have any powers to punish me for the social media posta, media interviews and write-ups that allegedly damage the reputation of the Justices of the Supreme Court and the Judges who have served thereon over the years, ” he says.

He said the alleged social media postings, media interviews and write-ups that are claimed to have damaged the reputation of the Supreme Court of Kenya and the Judges who have served thereon over the years concern the shortcomings of the Supreme Court of Kenya troubled institution that is riddled in corruption.

The lawyer noted that former Chief Justice David Maraga who became the 14 Chief Justice and the President of the Supreme Court of Kenya in October 2016 faced several petitions before the Judicial Service Commission.

He said the petitions wanted him removed from office for gross misconduct most notably one by Yusuf Dimbil who accused him of tribalism in that he appointed only members of his Kisii tribe in his office. The cases cited include that of his chief of staff, personal assistant, legal counsel, secretaries and other staff.
Another petition was filed by Busia Senator Okiyah Omtata accusing him of interference with the decisional independence of a Judge of the Employment and Labour Relations Court by removing a case file from the Judge concerned while judgement was pending delivery.

The activist had instituted a case challenging the decision of the government to re-advertise the vacancy for the auditor-general.

On the day the judgement of the court was scheduled to be delivered, the parties were notified that the judgement was not ready since the Chief Justice David Maraga had called for the file for unexplained reasons.

ACTIVIST PUSHES FOR QUASHING OF HEALTH LAWS ARGUING THAT THEY WERE ENACTED WITHOUT MEANINGFUL PUBLIC PARTICIPATION.

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Lawyer Harrison Kinyanjui for Activist Joseph Aura making submissions before three judge bench. /PHOTO BY S.A.N.

BY SAM ALFAN.

Activist Joseph Aura has submitted that it is illegal to compel Kenyans to register with the newly established Social Health Insurance Fund (SHIF) as a condition before accessing government services.

While urging the High Court to quash the Social Health Act, 2023, the Primary Health Act, 2023 and the Digital Health Act, 2023, Aura said the laws make it mandatory for Kenyans to register with the fund before getting government services.

He told the three judge bench consisting of Justices Alfred Mabeya, Robert Limo and Fred Mugambi that it is illegal to deny Kenyans services for not registered under the fund.

“Section 47(3) of the SHIF, 2023 is equally unconstitutional as it implies that every Kenyans MUST a prior be digitized via unique biometric, in order to be recognized as statutorily ‘compliant ‘with the provisions of SHIF, 2023,” he submitted through his lawyer Harrison Kinyanjui.

He further told the court that National Assembly and the Senate failed in their mandate to ensure the three legislations adhered to the constitution.

“The National Assembly and the Senate stepped outside their constitutional mandate in purporting to legislate the 3 impugned laws without viable public participation.

Kinyanjui submitted that by passing the three health laws without viable public participation, the outcome of the said legislation is unconstitutional.

He also questioned the criteria used to pick the community health promotors, arguing that most of them had no background in medical field.

Even a wheelbarrow and handcart pusher or mama mboga can be picked meaning they will enter the wrong information to the data system,” he said.

Aura told the judge Enock Mwita section 20 of the Primary Health Care Act comprises unconstitutional edicts, serving alien, and diabolical agenda not sanctioned by Kenyans and it violates Article 187(2)(b)of the Constitution.

“The National government cannot assume responsibility over health function micro implementation, as assigned by the fourth schedule,” submitted lawyer Kinyanjui.

Governors have opposed the implementation of the new Social Health Insurance Fund (SHIF) dealing a blow to President William Ruto’s plan for universal health care.

In submissions filed in court, the Council of Governors (CoG) opposed the roll-out of the programme through the Social Health Act, arguing that some of the provisions are unconstitutional.

“Further, that the primary Health Act usurps County Government in health service delivery and in the interest of justice, the court finds that the petition is merited and should be allowed,” CoG pleads in court documents.

The petition was filed by activist Joseph Aura through lawyer Harrison Kinyanjui as he challenged the implementation of the Social Health Insurance Act, 2023, which repealed National Hospital Insurance Fund (NHIF) and established three new funds.

HAVI WANTS MACHARIA NJERU TO CEASE REPRESENTING LSK AT THE JUDICIAL SERVICE COMMISSION.

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Incoming male representative commissioner elect Omwanza Ombati, outgoing commissioner Macharia Njeru and former Law Society of Kenya Nelson Havi.

BY SAM ALFAN.

Former Law Society of Kenya (LSK) president Nelson Havi has moved to court seeking to prohibit the outgoing commissioner Macharia Njeru from acting as the LSK representative to the Judicial Service Commission (JSC).

Lawyer Havi wants Njeru prohibited from participating in the actions and decisions of JSC including interviews for candidates for Judges of the High Court, set to begin from April 3.

The city lawyer further wants the court to quash the decision of JSC communicated in the notice dated 7th March, 2024 notifying the public of shortlisted candidates for interviews for the judges.

According to lawyer Havi, majority of the candidates shortlisted are above 15 years’ experience whilst a majority of the applicants rejected are between 10 and 14 years’ experience.

“For instance, for the first 20 shortlisted candidates only 1 is of 14 years’ experience with none below that practice years limit. On the other hand, for the list 20 rejected application 7 are between 10 to 14 years practice years limit,” says Havi.

Havi further seeks the court to direct JSC to consider and evaluate the applications for candidates for interviews for the office of Judge of High Court received subsequent to the notice published by the JSC on 13th October last year and the consideration and evaluation be undertaken by JSC in strict compliance with the requirements of Article 166(5) of the Constitution.

The lawyer further seeks the court to issue a conservatory order suspending the implementation of the decision of the JSC communicated on 7th of March 2024 notifying the public of shortlisted candidates for interviews for the public judge scheduled to commence next month.

Havi argues that upon the election of incoming LSK male representative lawyer Omwanza Ombati to the JSC, the mandate of Njeru ceased to act for the LSK as its male representative.

He adds that Njeru being a holder of Public office or state officer was obliged to proceed to terminal leave 30 days before the 5th anniversary of his swearing in being on April 14th pursuant to the requirements of section E 12 of the Human Resources Policies and Procedures manual for public service, 2016.

He adds that the interview for High court judges are scheduled for 3rd of April and the first candidate scheduled to be interviewed is Macharia Njeru.

Havi further adds that he requested JSC to cancel interviews until incoming commissioner Omwanza is sworn in but the commission declined and informed him the process will proceed with interviews with Macharia as the male representative despite protestation.

Havi accuses the JSC and Macharia of denying him right to be represented in the making of the decision of JSC by an elected representative of his choice and thereby curtailing him his enjoyment of the rights and fundamental freedom.

Havi adds that JSC and Macharia have failed to observe, respect, protect, promote and fulfil the rights and fundamental freedoms of the Petitioner in the Bill of Rights by curtailing the Petitioner’s entitlement to elective representation in the making of decisions by the JSC contrary to the requirements of Article 21 (1) as read together with Article 38 (2) (a) of The Constitution of Kenya.

“The 1st and 2nd Respondents (JSC and Macharia) have limited the Petitioner’s (Havi) entitlement to elective representation in the making of decisions by the 1st Respondent contrary to the requirements of Article 24 (1) as read together with Article 38 (2) (a) of the Constitution of Kenya,” he adds

Havi argues that JSC and Macharia have discriminated against a majority of applicants for the public office of Judge with over 10 years of experience but below 15 years of experience contrary to the requirements of Article 27 (1), (2), (3), (4) as read together with Article 166 (5) of the Constitution.

He adds that the Commission and Macharia have violated Article 38 (2) (a) of The Constitution of Kenya by imposing Macharia in the elective public office of male representative of the LSK in place of the duly elected male representative subsequent.

PROF OJIENDA SEEKING MORE THAN SH5 MILLION FROM NAIROBI COUNTY GOVERNMENT.

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Kisumu Senator Prof. Tom Ojienda.

BY SAM ALFAN.

Kisumu Senator Tom Ojienda has moved to court seeking orders to compel Nairobi City county government to pay him Sh5.1 million.

Prof Ojienda, who is also an advocate of the High Court, accuses the county government of failing to pay him for legal services undertaken on behalf of the county.

He has named the County Executive committee member for finance, county secretary and county chief finance officer as respondents in the case.

“The Applicant(Prof. Ojienda) is therefore seeking leave of this Court to file an application seeking an order of mandamus to compel the Respondents (County Government) to settle the amounts owed, that is Sh. 5,112,445.24,” says Ojienda. 

He said despite being aware of the sums we’re due and owing for legal services rendered, the county government have to date failed or refused to settle the decretal sums.

Prof Ojienda said the debt has been pending for over five years now and he is left with no other recourse other than to seek refuge from the Court, hoping that it will be reimbursed for legal services rendered to the county government. 

In a different matter, Ojienda confirmed to the court he was paid Sh15 million by the County government on Friday. 

The lawyer told the court that an Advocate-Client Bill of Costs dated 16th January 2019, which Bill arose out of a Court Judgement in the parent file, Petition No. 315 of 2014; Wycliffe Indalu Adieno vs City Council of Nairobi, Attorney  General & Nairobi City County Assembly in which he represented the County Council of Nairobi (now County Government of Nairobi). 

The Deputy Registrar of the High Court then taxed the Bill of Costs dated 16th January 2019 at Sh. 3,585,785.00 in a Rruling delivered on 9th October, 2019.

The Deputy Registrar also issued a Certificate of Taxation dated 10th January 2020 of Sh3,585,785.00 against the County Government of Nairobi.

 
He adds that  at the time of Taxation, the County Government was represented by the firm of Munyasya & Company Advocates who entered appearance and even filed submissions dated 8th July 2020 in opposition to the Ojienda’s Bill of Costs.

On 7th June 2021, Judgment was entered in favour of the Applicant for the payment Kshs. 3,585,785.00 and an Order issued on 7th June 2021 for the same. 

Subsequently, the Applicant extracted a Certificate of Order against Government and on 24th February, 2023.

The Certificate of order directed that the sums payable by theNairobi County to Ojienda were principal amount Sh.  Interest at 14% p.a from 10th February 2020 to 24th February 2023 Sh5,112, 445.24

Ojienda proceeded to serve the county with reminders dated 27th March 2023, 2nd May 2023 and 3rd July 2023 requiring the county to settle the decretal sum of Sh. 5,112,445.24 to no avail and further filed affidavit of Service dated 3rd July 2023 depicting proof of service.

COURT BLOCKS I&M BANK APPOINTED ADMINISTRATOR FROM MANAGING CAPE HOLDING LIMITED.

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Dusit D2 Hotel. /COURTESY PHOTO.

BY SAM ALFAN.

The High Court has suspended the appointment of two receiver managers to administer Cape Holdings Limited, a company that was placed under administration by I &M Bank.

Justice Alfred Mabeya suspended the appointment Ponangipalli Venkata Rao and Swaroop Rao as joint administrators, pending hearing and determination of the suit filed by Senergy Industrial Credit Limited, which lays claim to Cape Holdings.

The court blocked the joint administrators from assuming office, pending the determination of the case.

“A temporary injunction is hereby issued restraining Ponangipalli Venkata Rao and Swaroop Rao from assuming office as joint administrators of Cape Holding Limited and from taking any other steps in furtherance of their appointment,” ordered Judge Mabeya.

Synergy Industrial Credit limited through Senior Counsel Ahmednasir Abdullahi submitted that the placement of the Company under Administration is very prejudicial to the rights and interests of the firm who is presently embroiled in litigation before various courts over the execution of its Decree issued on 25th March 2021.

“This Court has powers under Section 604 of the insolvency Act to remove an administrator from office if satisfied that circumstances exist that make it inappropriate for the administrator to continue in office,” Ahmednasir told the court.

He added that the matter is urgent and should be prioritized for hearing and disposal on the grounds Cape Holdings Ltd was placed under Administration for the second time by I&M Bank Limited on 29th February 2024 under Section 534 of the Insolvency Act.

“A precursor to such appointment is that the appointing creditor must be a holder of a qualifying floating charge. Section 536 of the Insolvency Act also provides that an Administrator cannot be appointed if the floating charge is not enforceable,” submitted Ahmednasir.

The firm contends that I&M Bank’s appointment of Rao and Swaroop as Joint Administrators of the Company on 26th February 2024 is irregular as the Debenture upon which such appointment is premised is unenforceable and does not meet the criterion of a “qualifying floating charge capable of giving rights to the Bank to appoint an Administrator in the manner that it did.

He said Cape Holdings Ltd, was first placed under Administration by I & M Bank on 12th October 2021 in under the guise of a Debenture dated 15th December 2020.

“This is the same Debenture under which the present Administration has been undertaken. The Debenture was for the sum USD 25.000.000) and was secured by, inter alia, a floating charge over all freehold and leasehold properties, all stocks bonds and securities, book and other debts revenues, uncalled capital and goodwill undertakings and all other assets and rights such as stock-in-trade, ” court heard.

The Debenture was categorical in the First Schedule that there is no immovable property, whether freehold or leasehold, that had been charged as security for purposes of this Debenture.

“When the Company was first placed under Administration, the firm as a creditor of the Company, filed an application under Section 560(1)(d) of the Insolvency Act seeking leave to institute execution proceedings against the Company on account of its Decree issued in High Court issued on 25th March 2021,” he added.

Justice Mabeya granted leave on 10th December 2021. In the matter of Cape Holdings Ltd for the firm to proceed with execution aforesaid. Indeed the firm proceeded to execute against the Company for the decretal sum of Sh. 4,497,776,260.35 by attaching the property known as L. R. No. 209/19436 (I.R 120877) otherwise known as the 14 Riverside.

Vide a Prohibitory Order issued on 5th January 2022 by the Deputy Registrar under the Provisions of Order, the execution against the Company in respect of the attached property L. R. No. 209/19436 was completed such that what is pending is the sale thereof which sale could not be conducted as directed by the High Court on account of stay of execution orders issued by the Court of Appeal on 1 April 2022 pending the hearing of the Appeal. The same is pending Judgement on 21 June 2024. 8.
The Bank, despite enjoying an order of stay and awaiting Judgement, as a result of the First Administration has now placed the Company under a Second Administration thereby using Two Administration processes to protect its interests to the detriment of the firm.