High Court orders release of former Savannah Cement boss Benson Ndeta after Sh4.5 billion fraud charges
What you need to know:
- The prosecution opposed his release on bond arguing that Mr Ndeta is a flight risk.
- Ndeta's co-accused, Mr Charles Hills Jr, was not in court when the charges were read.
The High Court on Friday evening ordered the release of businessman Benson Ndeta, pending the determination of a petition he has filed.
This is after the Savannah Clinker boss — and who formerly headed Savannah Cement — was charged denied Sh4.5 billion fraud charges before a Milimani Magistrate’s court.
High Court judge Bahati Mwamuye said Mr Ndeta should be released, forthwith, a few hours after a Nairobi magistrate ordered that he be remanded at Muthaiga Police station until Monday.
The order had blocked the police from arresting him and the Director of Public Prosecutions Renson Ingonga from preferring criminal charges against the businessman over matters relating to Savannah Cement Limited, where he was a majority shareholder, on the basis of the loans borrowed by the manufacturer.
“..and if the Petitioner/Applicant (Mr Ndeta) is in custody with respect to any of the foregoing at the time this Court Order is served then, he shall be released forthwith,” said the judge.
The court directed his lawyers to serve the court documents on the DPP by close of business on Monday, December 2.
The matter will be mentioned on January 21, for further directions.
Earlier in the day, Milimani senior principal magistrate Gilbert Shikwe directed the businessman to be remanded at Muthaiga police station until Monday December 2, when he will rule on Mr Ndeta’s application, to be freed on bond.
The prosecution opposed his release on bond arguing that Mr Ndeta is a flight risk since he has not shown the police his residence and has withheld any information about himself.
The businessman denied eight counts including a conspiracy to commit a felony, obtaining execution of a security by false pretense and uttering false documents.
Immediately he denied the charges, his lawyer Cecil Miller termed the allegations as malicious, saying it was astonishing that an industrialist can be charged for securing a loan from a lender to create employment and increase the country’s revenue.
“Mr Ndeta is a victim of business competition after (he) successfully bided for the purchase of Bamburi Cement Company,” Mr Miller submitted, adding that his client was the first person in history to be charged with a criminal offense for obtaining a commercial loan.
His co-accused, Mr Charles Hills Jr, was not in court when the charges were read.
On the first count, Mr Ndeta and Mr Hills Jr are accused of conspiracy to commit a felony by obtaining a loan of $35 million (Sh4.5 billion) from Barclays Bank, now known as Absa Bank.
It is alleged that they committed the offence on diverse dates between February 27, 2017 and January 24, 2018, with intent defraud.
On charges of obtaining credit by false pretense, Mr Ndeta and Hills Jnr are alleged to have jointly obtained the loan purporting to be acting on behalf of Savannah Cement Limited.
Mr Ndeta further denied charges of obtaining registration by false pretense. The charge sheet stated that he committed the offence May 9, 2018, at Absa Bank headquarters in Nairobi.
It is alleged that he knowingly and fraudulently uttered forged cooperate guarantee loan security documents, dated May 9, 2018, subordination agreement dated the same day and extra minutes of Savannah Heights Limited to Christine Mwende Nzau, a Corporate Relationship Manager, purporting them to be genuine documents issued by Savannah Cement.
Mr Hills Jnr is alleged to have procured for the cement manufacturer, a guarantee and certificate of indemnity by falsely pretending that he was the director and secretary of Savannah Heights Limited.
He is further alleged to have a subordination agreement dated 9th May 2018 between Savannah Heights Limited, Seruji Limited and Savannah Cement limited purporting himself to be a director of Savannah Heights Limited.
Through Mr Miller, Ndeta said the amount was meant to be pumped into his vast business empire.
While arguing that the accused was not a flight risk as claimed by prosecuting counsel Ms Judy Koech, Mr Miller maintained that the accused person was a Kenyan who has a family and school-going child with huge investment in the country, hence claims that he can flee the country were not true.
The prosecution also claimed that Mr Ndeta might interfere with investigations.
The charges come a few weeks after Mr Ndeta, through his firm Savannah Clinker, a private firm registered in 2019, proposed to pay Sh25.41 billion for Bamburi Cement.
The businessman offered to offer Sh70 for every share to acquire the giant company and beat Tanzania-based conglomerate Amsons Industries, which offered Sh65 per share or a total of Sh23.59 billion.
Savannah Cement, a company formed by a group of Kenyan and Chinese investors, to join the lucrative cement market, hit the headwinds that sparked shareholding fights, matters that are still pending in court.
The Kenyan shareholders came under Savannah Heights Ltd with Mr Donald Mwaura holding 30 per cent, Mr John Gachanga though Isinya Plains Limited holding 35 per cent and Mr Ndeta, 35 per cent.
The Chinese invested in the company through two companies- Wanho International Limited and ACME Wanji Investment Limited.
Wanho International and ACME Wanji Investment owned 60 per cent of Savannah Cement limited while Savannah Heights acquired the remaining 40 per cent in a deal that was cemented through a Memorandum of Understanding.
The partners later fell out after it emerged that Mr Ndeta bought off the Chinese and transferred the shares to Seruji ltd, a move that was approved by Competition Authority.
The firm was placed under administration by KCB and Absa after failing to pay the loan of Sh10 billion.
