Two directors of a real estate company with assets worth Sh2 billion are fighting in court over access to the firm’s bank accounts.
The officials of Kiambu-based Willstone Homes Limited, which sells houses off-plan, are fighting for the control of Sh839 million held in the firm’s accounts at Stanbic Bank.
Mr Ejidio Kinyajui and his co-director Victor Cosmus Muusya are locked in a bitter court battle at the Milimani High Court, Commercial and Tax Division, in Nairobi. Mr Kinyajui has accused his partner of locking him out as a signatory of the firm’s bank accounts.
Court filings show that Mr Kinyajui is a minority shareholder of Willstone Homes, whose controlling stake is held by Mr Muusya and Mr Patrick Thuo Marigi through their investment vehicle, Diamond Transfer Limited.
“The applicant is a corporate entity with a diverse ownership structure, with Ejidio Kinyajui holding a 20% stake and Diamond Transfer Limited controlling a 80% stake,” Mr Kinyajui says in a statement filed in court.
Mr Kinyajui is a former manager of Banda Homes, a real estate firm that went under with investors’ cash. He later co-found Willstone Homes.
Mr Kinyanjui argues the move to lock him out of the company accounts has threatened the financial stability of the firm and has put them on a collision course with home buyers over unmet completion dates for their housing projects.
Some of the houses being built by Willstone Homes along Kenyatta Road which have stalled.
Photo credit: Simon Ciuri | Nation Media Group
“These submissions are tendered on behalf of Willstone Homes Limited ... addressing a critical impediment to its operational capacity instigated by the actions of Victor Muusya, herein referred as the second respondent. The second respondent’s refusal to authorise essential financial transactions and to expand the cadre of bank signatories has not only crippled the applicant’s operations but also threatens its financial stability and corporate integrity,” Mr Kinyajui says.
“For reasons not properly known to the applicant, the second respondent has totally refused to approve any payments for land described above, payment for building materials and payment of salaries to employees of the applicant. The action of the second respondent could lead to serious lawsuits from clients who have purchased houses built on the same land,” he adds.
But in his replying affidavit, Mr Muusya claims that Mr Kinyajui has teamed up with the other director, Mr Thuo and accuses the two of engaging in conflict of interest, money laundering and tax evasion, adding that their actions risk sinking the company. He adds that the taxman and the Directorate of Criminal Investigations are investigating the firm.
Mr Muusya further claims that he has been asking for an audit of company books, an end to arbitrary firing of employees and a stop to illegal allowances he claims the other two directors have been drawing. He also says he has pushed for investigations into potential acts of economic crimes within the company.
“That the affidavit of Patrick and Kinyajui have deliberately failed to mention to the court that the company is under investigations for potential tax evasion and money laundering to the tune of Sh417,218,379 million. That the tax claim alone is indicative of how things might turn out for the company if the deep underlying issues are not resolved,” Mr Muusya notes.
“That further, as a result of the illegal, fraudulent, malicious actions as well as excluding me from decision-making in the company, the two deponents have consistently made unsound financial decisions aimed at self-enrichment. This includes instances such as paying themselves daily allowances, funding personal vacations and taking money directly from clients,” further allege.
Mr Muusya says in his court filings that he owns a 50 per cent stake at Willstone Homes through Capital Mabati Limited. He adds that for the last two years, he has been locked out of the company decision-making process and that the two directors have physically assaulted him at the firm’s premises.
He tells the court that if proper interventions are not made, Willstone Homes is on the brink of collapsing, citing other real estate companies that went under with investors’ money such as Gakuyo Real Estate and Suraya Properties Group.
“That in view thereof, it is necessary than an urgent audit of accounts is done on the company to establish the extent of damage and the financial health of the company, as well as establish the correct amounts owed to the taxman, before any further payments are made by the company,” Mr Muusya has told the court.
“That it is therefore falsehood to allege that I have not been cooperative or that I have been sabotaging the operations of the company. That I therefore swear this affidavit in opposition to all prayers sought by the plaintiff , and urge the court to allow parties to exhaust internal structures of resolving ensuing issues,” Mr Muusya says while dismissing an application by Mr Kinyajui filed under certificate of urgency seeking to have himself enjoined as a signatory to the bank accounts.
However, Justice J. W. W. Mong’are, in his ruling, allowed Mr Kinyajui to be enjoined as a signatory to Willstone Homes’s bank accounts pending the hearing of the main suit set for October 14.
“That pending the hearing and determination of the main suit, this honourable court be pleased to order the defendant to allow Ejidio Kinyajui , the director of the plaintiff, to be one of the signatories of the bank accounts held by the plaintiff at the offices of the defendant with the mandate of any two signatories to sign,” the ruling reads in part.
In its ruling, the court relied on a company resolution passed on April 19 in which Mr Muusya and his partner agreed to have Mr Kinyajui as a signatory to bank accounts.
