Kamlesh Pattni sues CBK for millions
Businessman Kamlesh Pattni is suing the central bank of Kenya for millions of shillings. Through a company associated with the businessman, Pattni is seeking Ksh 55.6 million which he claims was held by the Pan-African bank after it was taken over by the Kenya deposit Insurance Corporation nearly 25 years ago.
Kamlesh was one of the major architects of the golden berg scandal which saw the country lose billions through a fake gold export scheme in the 1990s. In his application, the businessman argues that the Pan African bank held on behalf of Uhuru Highway Development Ltd(UHCL) a sum of Ksh. 70.9 million shillings. The bank was placed under liquidation in 1994.
UHCL, the company whose principal shareholder is M Pattni, logged a claim with the Deposit Protection Fund Board( now KDIC) and was paid Ksh 15.4 million. The money was paid to the receiver manager of Grand Regency Hotel (now Laico Regency), on behalf of UHDL, but without the authority to do so from UHDL. Mr. Pattni is not pursuing this payment but is seeking the balance of Sh55.6 million.
According to the UHDL director, Mukesh Vaya, the DPFB had committed to keep this amount in abeyance and continue holding it in trust, pending resolution of a separate dispute between the company and related parties. The dispute is about the land on which Laico Regency sits on. The legal dispute between UHDL and the CBK over the grand regency was settled in 2008 where under the settlement, the CBK agreed to abandon all its claims against UHDL and related parties, in return UHDL was to relinquish and assign all their rights over the hotel to the banking industry regulator.
“UHDL and related parties fully relinquished and assigned to CBK all their rights and proprietary interests on Grand Regency Hotel, thereby enabling CBK to recover sums due to it in full through the subsequent sale of the hotel,” says Mr. Vaya in court papers.
The hotel had been put in receivership by the CBK in an attempt to recover Goldenberg-related money from Mr. Pattni.
As at the end of 2001, most, if not all creditors of a ranking equal to UHDL had been paid close to 100 per cent of their claims by the DPFB. The CBK now wants to be removed from the case, arguing that the application relates to an institution which is under liquidation, and one that it, therefore, has no statutory mandate over.
Kennedy Kaunda Abuga, the CBK’s director in-charge of legal services, maintains that UHDL’s claim that the dispute it had with the regulator is over is inaccurate. The dispute regarding the redemption and sale of Grand Regency Hotel, Mr. Abuga says, is still pending determination.
Westmont Holdings, a foreign investor, is appealing a ruling by High Court judge Richard Mwongo delivered last December, dismissing a claim it had lodged alongside Mr. Pattni, against the CBK. A counter-claim by the CBK was also dismissed.
