Equity loses round one in Sh150m shares transfer suit

What you need to know:

  • Justice Fred Ochieng’ on Thursday also ruled that he could not drop Equity from the suit saying there was still no guarantee that it was not involved in the alleged fraudulent transfer.

An investor has been allowed to amend his claim against Equity Bank following allegations that the lender is withholding proceeds from the sale of his shares transferred to its chairman Peter Munga.

Mr Joseph Kamau sued the bank, its securities and custody service arm - Equity Nominees Limited - and the group chairman over the transfer of his three million shares.

He said the balance of the proceeds has never been paid to him despite confirmation by the seller Dyer and Blair that they were transferred to the bank’s chairman.

The bank also lost a bid to have the suit dismissed. The alleged irregular transfer of Mr Muturi’s TransCentury shares worth Sh150 million was done following his inability to repay a Sh40 million loan.

NO GUARANTEE

Justice Fred Ochieng’ on Thursday also ruled that he could not drop Equity from the suit, saying there was still no guarantee that it was not involved in the alleged fraudulent transfer.

Mr Muturi in 2011 agreed to sell his stake to Mr Munga at Sh50 each to help him settle a Sh40 million loan he had taken from Equity Bank. The bank was to deduct the balance of Sh33 million, and pay the rest to Bethany Vineyards - Mr Muturi’s company.

The businessman now wants a refund of the entire amount of Sh150 million plus an interest of 18 per cent from 2011.

Equity wanted to be removed from the proceedings, saying that its role was compromised when its chairman paid the balance of the loan, which stood at Sh33 million.