, NAIROBI, Kenya, Dec 11 – The Court of Appeal has upheld a decision to allow the withdrawal of civil suits filed by law firm of Havi and Company Advocates on behalf of two investment companies, Tatu City and Kofinaf Limited.
Appellate judges Erastus Githinji, Martha Koome and GBM Kariuki found and held that the law firm had no authority to file civil suits against seven directors of the investment companies.
The judges disallowed the application by Nelson Havi purportedly filed by Tatu City, Kofinaf limited, former Central Bank Governor Nahashon Nyagah and Vimal Shah against majority shareholders of Tatu City Investment Company.
They said that the civil suits which were withdrawn by the High Court order and endorsed by the Deputy Registrar were filed in contravention of the resolution of Tatu City and Kofinaf board directors.
The two major holding companies of the controversial Sh240billion Tatu City project bowed out of the four-year legal wrangling between the warring foreign and local partners.
The Commercial Division gave the greenlight to the parent company, Tatu City Ltd and its main local subsidiary Kofinaf Ltd, to withdraw from the dispute pitting the foreign majority shareholders against their local minority partners.
The court’s Deputy Registrar approved an application by Senior Counsel Ahmednasir Abdullahi seeking the withdrawal of the two firms from the civil suits involving ownership of huge land holdings in Kiambu County that form the backbone of the ambitious project.
On September 16, all the directors of the two companies participated in a board meeting at the project site’s Tatu House to discuss circumstances that have created bad blood among them, resulting in the filing of a plethora of cases that have over-shadowed the development.
The foreign shareholders accused their local partners, led by former Central Bank of Kenya (CBK) Governor Nyagah and industrialist Shah of attempting to alienate and transfer more than 2,000 acres of land belonging to the companies.
But the two investors claim they have been side-stepped in the management and financing of the mega-project and have demanded a forensic audit of accounts.
The hearing of the dispute remains suspended after Commercial Court Judge Eric Ogolla declined to disqualify himself amid unsubstantiated claims of bribery and impropriety.
In a related development, international audit firm, PriceWaterhouseCoopers, recently declined an assignment to scrutinize loan facilities advanced to the companies for the purchase of land following the fall-out between the parties.
The Directorate of Criminal Investigations has been investigating Nyagah over allegations that he used close relatives and cronies to irregularly transfer shares worth Sh5.3billion in a grand conspiracy to defraud the parent company. The sleuths have recommended the prosecution of Nyagah and five other people.
Nyagah has been granted temporary conservatory orders stopping his arrest pending the outcome of his petition challenging the validity of the investigations.
Similarly, two lawyers, Nelson Havi and Michael Osundwa, have secured court orders stopping their prosecution involving changes in the shareholding and directorship of one of the firm’s subsidiaries, Purple Saturn Properties that is connected with Nyagah.
In their petition, Havi and Osundwa said they were instructed by Purple Saturn, between February 24 and March 3, to change its ownership and management and duly informed the Registrar of Companies about the restructuring of the firm.
The proposed charge against the two lawyers alleges they conspired to defraud Kofinaf Company Ltd of its Sh5billion shares through Purple Saturn Properties Ltd. The offence was allegedly committed between June 13 and August 3.