Former CBK governor Ndung’u faces Sh50m legal fee suit

Tuesday January 10 2017

Former Central Bank of Kenya (CBK) Governor Njuguna Ndung’u. PHOTO |FILE | NATION MEDIA GROUP

Former Central Bank of Kenya (CBK) Governor Njuguna Ndung’u. PHOTO |FILE | NATION MEDIA GROUP 


Flamboyant Nairobi lawyer Donald Kipkorir has turned on his long-time client, Njuguna Ndung’u, hitting the former Central Bank of Kenya (CBK) governor with a Sh50 million legal fee claim.

Mr Kipkorir says in court filings that Prof Ndung’u has failed to pay the legal bill arising from his battle to avoid arrest and prosecution over the controversial award of a Sh1.2 billion ICT tender despite receiving several demand letters.

Prof Ndung’u ended his term at the CBK in 2015 under a cloud of controversy, with another legal suit seeking his arrest over alleged irregular award of the Sh1.2 billion tender to UK-based Horsebridge Networks.

The Ethics and Anti-Corruption Commission (EACC) had accused Prof Ndung’u of directing the CBK’s tender committee to ensure Horsebridge Networks won the tender.

But the former CBK governor in March 2015 secured an order from the Court of Appeal barring the EACC and the Director of Public Prosecutions from prosecuting him over the matter.

Investigating authorities claimed that Prof Ndung’u’s actions caused the Kenyan taxpayers a Sh400 million loss arising from Horsebridge’s inflation of the bid price.

Mr Kipkorir has now filed a bill of costs in court and is seeking for an order compelling Prof Ndung’u to offset the Sh50 million accumulated since 2014 when Prof Ndung’u instructed him to handle the suit and stop his arrest and prosecution.

Mr Kipkorir claims that his efforts in the case that proceeded to the Court of Appeal helped Prof Ndung’u complete his term as CBK governor while protecting his reputation.

“On receiving instructions from the client to act on his behalf in respect of the approved arrest, charge and indictment by the EACC and DPP of themselves relating to the Integrated Security Management Systems (ISMS), I proceeded to act by preparing and filing a petition and successfully got orders stopping the said arrest, charge and indictment and thus allowing the client to complete his tenure unlike all other previous CBK governors,” Mr Kipkorir says in the suit papers.

Citing the complexity of the case, whose preparation he says involved perusal, other incidental work and research, Mr Kipkorir says  protecting the client’s personal reputation and dignity came at a price of Sh30 million.

Other charges quoted in the bill are levies for several letters sent to and received from Prof Ndung’u, the CBK, the Senate, the EACC and the DPP in both hard copy and email.

Mr Kipkorir of KTK Advocates is also asking to be paid an additional Sh15 million — half of the case filing and document perusal fees — as part of its costs. An additional Sh4.8 million has been listed as VAT, bringing the total to Sh49,930,047.72.

Retired in 2015

Prof Ndung’u retired from the CBK in March 2015 having served two full terms as CBK governor and escaping the misfortune of being hauled out of office that had dogged nearly all his predecessors.

More recently, Prof Ndung’u has found himself in turbulent waters as his leadership and governance at the CBK came into question following the collapse of Imperial Bank, Dubai Bank and Chase Bank in quick succession.

Forensic audits have since revealed that CBK officials may have colluded with rogue bank managers to flout governance and operational rules.

Imperial Bank’s shareholders have claimed in court that Prof Ndung’u and his wife received favours from the collapsed lender’s former managing director, Abdulmalek Janmohammed, to help conceal the looting of Sh44.7 billion from depositors.

Besides, a forensic audit of the collapsed bank found that Prof Ndung’u’s wife billed Mr Janmohammed for a stay at a luxury resort in Thailand with a companion.

The former governor has also been put on the spot for the CBK’s disregard of whistle-blower emails calling for investigations into both Imperial Bank and Dubai Bank.

The Horsebridge tender almost got him prosecuted twice but restraining orders issued by the High Court and the Court of Appeal saved him from standing in the dock.

Prof Ndung’u was at the helm of the CBK when it first allowed the rollout of mobile money transfer service amid protests from banks. The mobile money transfer industry has since grown exponentially, making Kenya a leader in mobile banking.

Approved arrest

Prof Ndung’u instructed Mr Kipkorir to represent him in the petition against the EACC and the DPP in February 2014, when the DPP, Keriako Tobiko, approved his arrest and prosecution.

The CBK cancelled the tender initially awarded to Horsebridge, but High Court judge Weldon Korir in September 2014 ordered the banking sector regulator to award the UK-based firm the Sh1.2 billion tender.

Justice Korir said that none of the other bidders had questioned the award to the UK firm.