Businessmen raise alarm over Sh1.9bn damages paid out to Tanzanian firm

A view of containers at Kenya Ports Authority headquarters in Mombasa. /ELKANA JACOB
A view of containers at Kenya Ports Authority headquarters in Mombasa. /ELKANA JACOB

A group of businessmen have asked President Uhuru Kenyatta to intervene and save taxpayers from losing Sh1.9 billion awarded to a Tanzanian company by a Mombasa court after a row with KPA.

They said it is unfair and illogical to award Modern Holdings the sum after the company allegedly lost Sh60 million worth of goods.

The company sued the Kenya Airports Authority for failing to clear a consignment within the stipulated time between December 2007 and January 2008, during the post election violence.

Modern Holdings, which distributes energy drinks, said 21 of its containers were detained at the Mombasa port during that period.

They said KPA in consultation with KRA moved the long-term stay containers to Makupa, which was illegal.

They said six of the containers were cleared with waivers from KPA and KRA, but 15 others with contents worth Sh60 million were delayed, and the contents went bad.

Modern Holdings was then awarded Sh1.9 billion for the losses incurred.

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But the businessmen, led by Irungu Mwangi have disputed the figure saying: "This is 32 times more than the sum of capital they had. It is actually fraud and the parties must have colluded."

"How can you award somebody 32 times more?" he added.

They have asked the Attorney General to appeal the ruling on behalf of the government and threatened to hold demonstrations in Nairobi and Mombasa in the first week of January to force the court to rescind the decision.

"This is more than the NYS scandal and we must stop it," Mwangi said last Friday.

They made the complaint after Kenya Ports Authority got on December 21, 2016 when the Court of Appeal discharged an order freezing its bank accounts.

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But KPA was forced to pay Sh51 million within seven days of accessing its bank account as downpayment for the Sh1.9 billion awarded to Modern Holdings.

Justices Martha Koome, GBM Kariuki and Sankale Kantai issued the orders after parties in the case consented to it.

KPA said if forced to pay the entire Sh1.9 billion immediately it will suffer irreparable damage.

Being a state corporation, it said, it is constrained by fixed budgetary and financial allocations and as a result, not in a position to pay without prior planning.

The freeze was imposed on KPA by the High Court in Mombasa. It affected accounts in Citi Bank, Equity and National Bank.

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