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Investor loses Sh465m court fight with Jimnah Mbaru firm


Investor loses Sh465m court fight with Jimnah Mbaru firm

Wednesday June 14 2023

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

An investor has lost a bid seeking the Supreme Court to hear his appeal to have Jimnah Mbaru-owned Dyer & Blair Investment Bank pay him Sh465 million he had invested in the brokerage firm.

John Kung’u Kiarie, a former KCB director, claims Mbaru’s firm conspired with the anti-fraud unit to freeze his money two decades ago and later under-declared his returns on investment.

The Court of Appeal has dismissed his application for a second appeal at the apex court, saying the issues raised by the investor do not exceed his personal interests.

The judges noted that the matters he raised were linked to his business relationship with the investment bank and the dispute arising from it.

“We are not satisfied that there are any issues of general public importance involved, nor is the applicant raising any novel issues of law for determination by the Supreme Court,” Justices Daniel Musinga, Hellen Omondi and Imaana Laibuta ruled.

The law states that appeals at the Supreme Court involve matters of public importance or interest.

Treasury bonds

Mr Kiarie invested Sh91 million with the brokerage firm in March 2003 for the purchase of a Treasury bond but was awarded a paper worth Sh88 million.

On the advice of the investment bank, Mr Kiarie sold security at Sh91.6 million to invest in a new Treasury bond with a higher yield.

But before the plans were actualised, his banker CfC Stanbic was served with warrants allowing the Anti-Banking Fraud Unit to investigate his account.

The account was frozen, and Mr Kiarie was charged before a magistrate court in Nairobi with falsely obtaining Sh91.5 million.

The court subsequently acquitted him for lack of evidence, and he obtained an order lifting the freeze of his money and the interest.

Mr Kiarie later said Dyer & Blair released Sh67.5 million as the principal amount plus interest of Sh2.3 million.

He had earlier received Sh24 million as the case was pending, as it was not part of the amount targeted by the anti-fraud unit.

Mr Kiarie said he engaged the services of a certified accountant who assessed his return on the investment and advised that he should have fetched Sh465 million.

'A wave of deceit'

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

High Court judge Eric Ogolla ruled in his favour and directed the brokerage firm and his bank to pay him Sh310 million.

In his ruling, the judge termed the matter as a “complicated wave of deceit”. However, the Court of Appeal overturned the decision in July 2017.

Read: Reprieve for CfC Stanbic in Sh1.2bn award to ex-banker

The appellate court ruled that the investment bank never participated in the criminal case and thus did not have an opportunity to cross-examine Mr Kiarie’s general manager on the evidence he gave.

The court quashed the assessment of damages and the interest applied and directed that Mr Kiarie be paid an equivalent to the returns he could have earned from the investment in treasury bonds for a period of one year, minus the brokerage firm’s commission and annual fees.

Mr Kiarie was not satisfied and sought to escalate the matter to the apex court.

Mr Mbaru opposed the application saying he had complied with the court’s judgment and that Mr Kiarie accepted the payment and interest arising.

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