Sonko, Kabogo embroiled in a legal fight over Singapore firm's Sh2.3 billion

Sonko and Kabogo

Former Nairobi Governor Mike Sonko (left) and former Kiambu Governor William Kabogo. The two are in the middle of a complex legal battle involving shadowy Singapore-registered firm Kiwipay.

Photo credit: Nation Media Group

Two former governors have found themselves in the middle of a complex legal battle involving shadowy Singapore-registered firm Kiwipay, its directors and Sh2.3 billion that was initially frozen by the High Court last year over money laundering suspicions.

Fresh court documents filed by I&M Bank have exposed former Kiambu governor William Kabogo as the biggest beneficiary of a Sh340 million that originated from one of Kiwipay’s accounts with another lender.

The money I&M Bank released on March 31, 2023 is part of the Sh2.3 billion that Kiwipay directors are fighting over in court.

Details of the transactions have been revealed in a suit filed by Rene & Hans Advocates LLP, a law firm that claims to have represented Kiwipay directors in return for $2.5 million (Sh340 million) in fees.

Rene & Hans Advocates has sued Kiwipay’s local subsidiary, three of its directors — Stephen Maina Njenga, Felix Rantuu Lekishe and Solomon Joseph Maina — and Ecobank Kenya Ltd. Following the contested Sh340 million transfers, Kiwipay has sought to enjoin I&M Bank in the proceedings as an interested party.

The High Court in June last year froze Kiwipay’s bank accounts with balances totalling Sh2.3 billion following an application by the Assets Recovery Agency (ARA).

ARA said it was investigating Kiwipay and its owners over alleged credit and debit card fraud overseas and that the company could be laundering proceeds of the crimes in Kenya. But, in late September, a fight broke out amongst Kiwipay directors after it emerged that the ARA was set to drop its case against the firm and release the Sh2.3 billion.

In March, Rene & Hans Advocates received Sh340 million from Kiwipay’s accounts at Ecobank. The money was paid into the law firm’s I&M Bank account.

Rene & Hans Advocates in its declaration papers with I&M provided a court order allowing it to receive $2.5 million. Despite the court order stating the figure in dollars, the funds were paid into Rene & Hans Advocates’ shilling account.

On the same day that the money hit Rene & Hans Advocates LLP’s accounts, one of its officials made 13 transfers to individuals and law firms. Mr Kabogo received Sh130 million, while his real estate company Arcoverde (K) Ltd received Sh50 million. Other people who received money were Rene & Hans Advocates official Isaac Rene (Sh33 million), Mr Kenneth Odhiambo Ojwang (Sh25 million), Ms Sharon Mirella Wakho (Sh10 million), Mr Joel Gichiu Ngari (Sh5 million) and Mr Simon Munene Mwendia (Sh5 million).

Firms that received funds were Ivio Advocates LLP (Sh20 million), J. W. Weke & Company Advocates (Sh10 million), Squire Afrilaw Consult Ltd (Sh7 million) and MMA Advocates LLP (Sh5 million).

Three days after the transactions, a Kiwipay director, not named in court papers, visited I&M Bank in the company of former Nairobi governor Mike Sonko in protest.Mr Sonko demanded that the bank release to him and the Kiwipay director information regarding the money trail.

He also told the bank’s officials that there was a court order dated March 31, 2023 barring Ecobank from releasing the funds to Rene & Hans Advocates’ account at I&M Bank. But I&M Bank declined to share the information, citing customer confidentiality. The court papers do not indicate what capacity or role Mr Sonko has with Kiwipay. He is not listed as one of Kiwipay’s officials in ownership documents.

I&M Bank insists that it was only served with the court order on April 3, 2023 hence it was not aware of any impediment at the time Rene & Hans Advocates LLP was making multiple transactions.

The lender has asked the High Court to expunge it from the court case, arguing that it no longer holds any funds from the Ecobank batch hence cannot comply with the orders seeking to freeze the Sh340 million.

“The bank was not aware of any order stopping the transfer of the said funds and only came to learn about it on April 3, 2023 after the visit by Mr Sonko as well as upon receipt of the letters from [Kiwipay Kenya Ltd] and its counsels.

The bank received funds on March 31, 2023 supported by a court order dated March 27, 2023 and obliged to the applicant/customer instructions to transfer the funds,” I&M Bank legal manager Andrew Muchina says in court papers.

“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 is also opposed to be joined in these proceedings as it does not hold any funds which are the subject matter of these proceedings to warrant the intended joinder,” Mr Muchina adds.

The fight for control of the company and its funds are still ongoing in court. On one side is a Laos national, Monthinda Rashi, who claims ownership of the company she says is a payments solutions provider.

The other side has locals – Stephen Maina Njenga, Felix Rantuu Lekishe and Solomon Joseph Maina – who claim they were kicked out of Kiwipay directorship through fraud and forged documents.

They have obtained orders barring interference with the Sh2.3 billion stashed in multiple bank accounts pending determination of the case.