An investor’s bid to have Dyer & Blair Investment Bank, owned by Jimnah Mbaru, pay him Sh465 million has been rejected by the Supreme Court. John Kung’u Kiarie, a former KCB director, alleged that Mbaru’s firm conspired with the anti-fraud unit to freeze his money two decades ago and later under-declared his investment returns.
The Court of Appeal dismissed his application for a second appeal to the apex court, stating that the issues raised by the investor were limited to his personal interests. The judges noted that the matters raised were connected to his business relationship with the investment bank and the resulting dispute.
“Justices Daniel Musinga, Hellen Omondi, and Imaana Laibuta ruled that there were no issues of general public importance involved, nor were there any novel legal issues that needed determination by the Supreme Court,” as per the ruling.
According to the law, appeals at the Supreme Court typically involve matters of public importance or interest. In Mr. Kiarie’s case, he had invested Sh91 million with the brokerage firm in March 2003 to purchase a Treasury bond but received a paper worth Sh88 million instead.
Upon the advice of the investment bank, Mr. Kiarie sold the security for Sh91.6 million to invest in a new Treasury bond with a higher yield. However, before the plans could be realized, his banker, CfC Stanbic, received warrants allowing the Anti-Banking Fraud Unit to investigate his account.
As a result, his account was frozen, and Mr. Kiarie was charged with falsely obtaining Sh91.5 million before a magistrate court in Nairobi. Subsequently, he was acquitted due to lack of evidence, and an order was issued to lift the freeze on his money and the associated interest.
Mr. Kiarie claimed that Dyer & Blair later released Sh67.5 million as the principal amount, along with an additional Sh2.3 million in interest. Mr. Kiarie initially sued Dyer & Blair and CfC Stanbic in 2009, alleging collusion to deprive him of his Sh91.5 million investment.
In a ruling, High Court judge Eric Ogolla found in favor of Mr. Kiarie and directed the brokerage firm and the bank to pay him Sh310 million. However, in July 2017, the Court of Appeal overturned the decision. The appellate court ruled that the investment bank had not participated in the criminal case and therefore did not have the opportunity to cross-examine Mr. Kiarie’s general manager regarding the evidence provided.
The court nullified the damages assessment and the applied interest and instead directed that Mr. Kiarie be paid an amount equivalent to the returns he could have earned from the investment in treasury bonds for one year, minus the brokerage firm’s commission and annual fees.
Mr. Kiarie was unsatisfied and sought to escalate the matter to the Supreme Court. Mr. Mbaru opposed the application, stating that he had complied with the court’s judgment and that Mr. Kiarie had accepted the payment and interest provided.
