Fund seeks to recover Sh1.2 billion from collapsed bank’s directors

Milimani law courts Milimani law courts. PHOTO: FIDELIS KABUNYI

DPF is seeking orders to recover the cash from ex-directors and immediate family members

A former director of a collapsed bank and his wife are fighting a suit by the Deposit Protection Fund (DPF) which is seeking to recover Sh1.2 billion from them and companies associated to them.

James Kahumbura and Wilson Kipkoti who served as executive directors of Prudential Building Society which is under liquidation, are accused of charging a private property to the bank therefore causing the loss.
Kahumbura’s wife Lucy Kahumbura, has been included as a beneficiary of the money together with eight other companies associated with the two ex-directors.

In what may turn out to be a land mark ruling, DPF is seeking orders to recover Sh1.2 billion from not only the ex-directors and immediate family but also from any property associated with them or that is deemed to have acquired the assets.
The companies include Prudential Developers, Hazel Promotions, Le Vogue Hair & Beauty Salon, Brisky Properties, Interstate Commercial Agencies, Pacific Holdings, Pelican Engineering and Construction and Standard Assurance.

More than 1,000 account holders were affected by the collapse, with the National Social Security Fund losing close to Sh1 billion.
In the court documents, DPF says there were irregular dealings such as unrecorded or deliberate misrepresentation of transactions, unsecured or improperly secured disbursements and fictitious entries among other malpractices.
However, through lawyer Roger Sagana, Kahumbura and his wife have objected the suits. In affidavits filed on Friday, Mrs Kahumbura wants her name struck out from the suit arguing that DPF is yet to prove that she benefited from the said money.
Mrs Kahumbura argues that she has never received any money either from her husband or Prudential Building Society or neither does she own property that has any connection with the collapsed bank or husband.

“I have never held any account with the applicant/respondent or taken any facility from it at all. The applicant has absolutely no claim or evidence against me,” she argues.

Justice Fred Ochieng has directed the parties to return to court next Tuesday for directions.
On his side, Mr Kahumbura through lawyer Sagana has raised preliminary objections to the suit and wants DPF first to prove the said breach of trust that resulted to the loss claimed.

Sagana further wants DPF to the particulars of 1,211, 540,962.95 attributed to his client and the particulars of the various transactions, accounts facilities resulting to the loss by the bank.
Kipkoti, the proprietor of Sirikwa Hotel in Eldoret is yet to respond to the suit. The two are accused of having presided over a gradient transaction that saw the liquidated bank lose over Sh1.2 billion, with DPF seeking to recover the amount plus interest as from July 1, 2012.

DPF wants to seize Sh800 million property in Upper Hill which was owned by Le Vogue Hair and Beauty Salon which is associated with Kahumbura and his wife. However, the property has since been sold to Brisky properties limited which has been enjoined too.
Brisky says in court documents that it purchased the property registered as L. R No. 209/4982 from Le Vogue Hair for good consideration and without notice of encumbrance or dispute in relation to the property or any of the alleged fraud and breach of trust by Mr Kahumbura and Kipkoti.

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