How Britam investigation unearthed 'mysterious' transfer of Sh3.9 billion

The court battle around the multi-billion shilling Britam Investments firm, which has become talk of town in business circles, is baffling.

Britam is one of the fastest growing investments firms in Kenya today, having secured various interests in insurance, banking and even real estate business.

But now, the firm finds itself in a legal war with its former employees. At the heart of the battle in the multi-billion shillings, which has found its way into the court room, are investigations done by Britam after its top most executives exited the company two months ago.

The company, in a bid to recover Sh3.94 billion from the former executives, who resigned from its asset management unit, British-American Asset Managers (BAAM), narrated to the court how the monies were allegedly transferred from its coffers and dished out without the knowledge of investment committee and its board.

According to Britam’s acting chief executive officer Jude Anyiko in the papers filed by lawyer Fred Ngatia, audit exercises done by the company’s legal and audit firms unveiled scathing information that allegedly remained a secret held by Edwin Dande, Elizabeth Nkukuu, Shiv Arora and Patricia Wanjama.

Mr Anyiko, in his affidavit before the court, said there were email exchanges between Dande and Wanjama, but this remained words between the group of four.

Mr Dande and his team are said to have allegedly concealed their tracks in the transaction by deleting the emails that had been exchanged and also withholding information regarding their activities from Britam.

Anyiko said the audit reports by KPMG and Coulson Hanney revealed the emails allegedly entailed a plot to withdraw cash held by Britam and its affiliates and also have the contracts under the investment firm executed without the approval of the Investment Committee or the Board of Directors. “On or around May 28, 2014, the first and third respondents (Dande and Wanjama) exchanged correspondence that entailed a conspiracy to do things that had not been approved by the investment committee or the Board of Directors,” the affidavit by Anyiko reads.

“The first to fourth respondents have fraudulently, wrongfully and without due authority wrongfully transferred or caused the cumulative transfer of Sh3,944,858,634 without the knowledge or the authority of the plaintiff, which acts have become known to the plaintiff through a forensic and legal audit,” the affidavit reads.

Anyiko told the court that Dande and his team further signed joint ventures two months later without consent from the committee or the board. All this time, the court heard that the investment committee had not heard a word on the moves by the former senior employees.

In the case before High Court judge David Onyancha, Britam’s acting CEO said Dande and the other three accused wired out of Britam Sh1.16 billion in five tranches to multiple accounts held by Acorn Group at a local bank and a further Sh2.78 billion to seven entities that are subsidiaries of Acorn. The court heard that this happened between July and August.

Anyiko said in mid-September, when Dande was handing over his office, he discovered that Sh1.6 bllion was missing from the firm’s accounts. It was then that he made inquiries to the company’s lawyer in London, Messrs SJ Berwin and Britam’s administrator in Mauritius and verified his reservations that the monies had indeed transferred on July 31.

“I traveled to Mauritius to make inquiries with the Britam Real Estate Fund (BREF) administrator Messrs Tri-Pro and bankers and my inquiry confirmed that the money had been transferred on the instructions of the first, second and fourth respondents (Dande, Nkukuu and Arora).

According to the court papers by Anyiko, Dande, Nkukuu and Arora had in their instructions to Messrs Tri-Pro that the Sh1.6 billion be passed as expenses money.

“They had signed a schedule indicating that the payment was an approved investment by the BREF Investment Committee,” he said, adding that contrary to the schedule signed by the three, there was no approval from the investment committee.

 BUY LAND

The enquiry, according to Anyiko, also unveiled that seven Acorn affiliate firms had received a share of monies divided from the perk.

Edenvale Developments is said to have received nearly Sh10 million in its account held in Chase Bank. Starling Park Properties got Sh42 million, Crimson Court Development got Sh43 million while Sinopia Properties bagged Sh151 million. Mikado Properties got over Sh900 million from the transfer. The court heard that the monies were allegedly meant to buy land for development in various parts of Nairobi, Kajiado and Machakos. “Due to the fraud, Britam’s holding company commissioned a legal audit on all transactions handled by Dande, Nkukuu and Arora,” he said.

In this audit, the law firm allegedly unearthed that a further Sh2.7 billion had been paid by Acorn Group to the Limited Liabilities Partnerships (LLP) it owned. All this is said to have been done a month after the first transaction and under the instruction of the three.

Anyiko argued that the payment, as had been instructed by former senior managers and done on or around August 6, was in disregard to an internal order to halt payments. “The first, second and third respondents transferred the sum to LLPs owned by Acorn Properties Limited and Acorn Investments Limited in fragrant regard of an express internal freeze on payments, which was known to them,” Anyiko said.

In this transaction, the court heard that more than Sh1.3 billion was transferred from Coral Development, Siyara properties, Valley Front Development, Spring Green Properties to Cresent Development.

Mikado received over Sh600 million from the transfer done from Valley Front Development’s account. However, Sh30 million was wired from the same company (Mikado) to that of Spring Green’s accounts.

The court heard that Dande and his team resigned from their positions after the said transactions.

“Dande’s handover was very problematic and protracted. I had to prepare a list of information that I needed from him to facilitate a smooth disengagement with the plaintiff but he refused to co-operate,” Anyiko said.

Justice Onyancha froze the accounts held by Acorn and its affiliates and the same has been the basis of a bitter legal war, with Acorn demanding that the court should lift the orders issued last week.

Acorn denied the allegations and told the court that the transactions were done in full knowledge of Britam’s management. Onyancha will on November 27 rule on whether the orders will be lifted.