Kiwipay Kenya Investor Accuses Law Firms For Exorbitant Charges As KRA Seeks A Share From The Firm Linked To Card Fraud

Kenya Revenue Authority is now seeking Sh3 billion in taxes from Kiwipay Kenya Limited; a company embroiled in Sh2.3 billion monies that had initially been frozen over money laundering claims.

In a new suit, a foreign investor who claims to be the main shareholder and Director of Kiwipay Kenya Ltd, claims the company continues to go deeper into debt as several suits regarding the firm await determination.

Monthida Rashi from Laos, a South east Asian country, is fighting to control the cash and company against three Kenyans who also lay claim to the said billions held at Eco Bank.

Rashi claims that the three Kenyans; Maina Njenga, Felix Rekishe and Solomon Maina resigned and therefore, could not purport to act for the company.

An order freezing the money was lifted last September after the Assets Recovery Agency (ARA) withdrew the application seeking to forfeit the money to the government.

How law firms shared the funds

Last month, High Court judge Dorah Chepkwony directed the law firm of Rene & Hans LLP to be paid US $2.5 million for representing three Kenyans after they were allegedly removed as shareholders and directors of Kiwipay Kenya ltd.

But soon as the money was released to I&M Bank, the law firm instructed the lender to distribute the funds.

Documents filed by the lender in court showed that Arcoverde (K) ltd received Sh50 million, William Kabogo Gitau Sh130 million, Kenneth W Odhiambo Ojwang Sh25 million, Sharon Mirella Wakho Sh10 million, Squire Afrilaw Consult ltd Sh7 million and Ivio Advocates LLP Sh20 million.

Others who received the share of the money are W Weke and Company Advocates Sh10 million, MMA Advocates LLP Sh.5 million, Isaac Rene Okumu Sh 25 million, Simon Munene Mwendia Sh5 million, Joel Githiu Ngari Sh5 million, Isaac Rene Okumu Sh7.2 million who also received another Sh.800,000.

Attempts by the main shareholder of Kiwipay Kenya ltd Laos citizen Monthida Rashi to block the distribution of the money were futile.

This is after the bank revealed that the funds had been released by the time it was served with a court order.

“In view of the foregoing, the Bank is unable to comply with the order stopping the transfer of the said funds as it has been overtaken by events,” the bank said in an affidavit filed in court.

The Bank is also opposed to be joined in the proceedings as it does not hold any funds which are the subject matter of these proceedings.

The Bank further states that on 3rd April 2023, former Nairobi Governor Mike Sonko visited the lender accompanied by Rashi demanding information on the company’s account.

However, the Bank declined to divulge any information claiming it would be in breach of the Bank’s duty of confidentiality with the law firm who is the Bank’s customer.

Rashi said she reached out to the former Governor requesting for assistance, being a foreigner.

On the same date of 3 April 2023, the Bank separately received two letters from Kiwipay’s Advocates informing it of the on-going cases and the existence of the court order, which barred it from transferring the said Funds.

The order barring EcoBank from transferring the subject funds was obtained on 31 March 2023 which was the same date the 2nd Respondent transferred the funds to the Bank.

I & M Bank claims it was not aware of any order stopping the transfer of the said funds and only came to learn about it on 3rd April 2023 after the visit by Mr. “Sonko” as well as upon receipt of the two letters from the 1″ Respondent and its Counsel.

The Bank received funds on 31 March 2023 supported by a court order dated 27th March 2023 and obliged to the law firm/customer instructions to transfer the funds.

New suit

In the new suit, Rashi claims the company stands to be penalised and lose business as a consequence of indebtedness and inability to meet its financial obligations whilst funds are held on the basis of the order procured through fraud, misrepresentation and ill motive. “Eco Bank has whilst the orders are subsisting paid money to other parties and consequently some of the liabilities that have accrued as debts to the company including statutory outgoings and taxes which have fallen due and attract penalties,” Rashi stated in court documents.

The SouthEast Asian National has also accused several law firms of exaggerated and fabricated claims on legal fees and other consultancy fees amounting Sh500 million

Rashi, through lawyer Wilfred Mati, claims she has been frustrated by various court orders as an investor and several law firms have obtained the orders for exorbitant payments.

“Company stalled its operation in November, 2022 as its funds in the account were frozen and dbts including taxes have accumulated and their debts now stand at Sh67 million,” she said in court documents.

It is her case that the said lawyers represent the interests of parties other than Kiwipay Kenya Limited where she is a director and shareholder.

She wants the court to order the law firms to refund the Sh500 million paid to them and the consent orders reinstating the three Kenyans as directors be suspended pending hearing of the suit.

She also wants the 10 suits filed relating to the company be consolidated and heard by one judge.

Justice Josephine Mongare of the Commercial Division directed the files be placed before Justice Alfred Mabeya for directions