Amsons’ Bamburi takeover bid rival faces Sh90bn fraud charges

If successful, the acquisition would be one of the largest takeover deals in East Africa and place Amsons among leading cement producers in the region.

Amsons Group, a family-owned conglomerate, operates in several African countries, including Tanzania, Zambia, Malawi, Mozambique, DR Congo and Burundi.

The bid for Bamburi Cement has received support from key shareholders, including Holcim, the Swiss-based global building materials giant, which owns a controlling 58.6 percent stake in Bamburi through its subsidiaries Fincem Holding and Kencem Holding Ltd.

Amsons’ bid faces competition from Savannah Clinker Limited, whose founder, Mr Benson Ndeta, was last Friday arraigned on Ksh4.5 billion (about Tsh90.5 billion) fraud charges.

His arrest and subsequent arraignment sparked political tensions in Kenya, with some politicians, including DAP-K party leader Eugene Wamalwa, accusing President William Ruto’s government of attempting to block Mr Ndeta’s bid for Bamburi Cement.

Mr Wamalwa suggested that the arrest was part of a deliberate effort to sabotage Mr Ndeta’s chances, claiming it was politically motivated.

“The arrest and prosecution of Ndeta are designed to hinder his bid for Bamburi Cement,” Mr Wamalwa said after meeting with party delegates.

Following his arrest, Mr Ndeta filed a petition in Kenya’s High Court, which ruled on Friday evening that he should be released pending the resolution of the case.

The court ordered Mr Ndeta’s immediate release after a magistrate had previously ordered his remand at Muthaiga Police Station in Nairobi until today. The ruling prevented further action from the police and the Director of Public Prosecutions (DPP), who had been preparing criminal charges related to Savannah Cement’s financial dealings.

High Court judge Bahati Mwamuye said Mr Ndeta should be released immediately.

The order had blocked the police from arresting him and DPP Renson Ingonga from preferring criminal charges against the businessman over matters relating to Savannah Cement Limited, where he was a majority shareholder, on the basis of the loans borrowed by the manufacturer.

“..and if the Petitioner/Applicant (Mr Ndeta) is in custody with respect to any of the foregoing at the time this Court Order is served then, he shall be released forthwith,” said the judge.

The court directed his lawyers to serve the court documents on the DPP by close of business today.

The matter will be mentioned on January 21, for further directions.

Earlier on Friday, Milimani senior principal magistrate Gilbert Shikwe directed the businessman to be remanded at Muthaiga police station until today  when he will rule on Mr Ndeta’s application, to be freed on bond.

The prosecution opposed his release on bond arguing that Mr Ndeta is a flight risk since he has not shown the police his residence and has withheld any information about himself.

The businessman denied eight counts including a conspiracy to commit a felony, obtaining execution of a security by false pretence and uttering false documents.

Immediately he denied the charges, his lawyer Cecil Miller termed the allegations as malicious, saying it was astonishing that an industrialist can be charged for securing a loan from a lender to create employment and increase the country’s revenue.

“Mr Ndeta is a victim of business competition after (he) successfully bided for the purchase of Bamburi Cement Company,” Mr Miller submitted, adding that his client was the first person in history to be charged with a criminal offence for obtaining a commercial loan.

His co-accused, Mr Charles Hills Jr, was not in court when the charges were read.

On the first count, Mr Ndeta and Mr Hills Jr are accused of conspiracy to commit a felony by obtaining a loan of $35 million from Barclays Bank, now known as Absa Bank.

It is alleged that they committed the offence on diverse dates between February 27, 2017 and January 24, 2018, with intent defraud.

On charges of obtaining credit by false pretence, Mr Ndeta and Hills Jnr are alleged to have jointly obtained the loan purporting to be acting on behalf of Savannah Cement Limited.

Mr Ndeta further denied charges of obtaining registration by false pretence. The charge sheet stated that he committed the offence May 9, 2018 at Absa Bank headquarters in Nairobi.

It is alleged that he knowingly and fraudulently uttered forged cooperate guarantee loan security documents, dated May 9, 2018, subordination agreement dated the same day and extra minutes of Savannah Heights Limited to Christine Mwende Nzau, a Corporate Relationship Manager, purporting them to be genuine documents issued by Savannah Cement.

Mr Hills Jnr is alleged to have procured for the cement manufacturer, a guarantee and certificate of indemnity by falsely pretending that he was the director and secretary of Savannah Heights Limited.

He is further alleged to have a subordination agreement dated May 9, 2018 between Savannah Heights Limited, Seruji Limited and Savannah Cement limited purporting himself to be a director of Savannah Heights Limited.

Through Mr Miller, Ndeta said the amount was meant to be pumped into his vast business empire. (NMG)