Home Court News Court stops a transfer of Sh 74Million legal fees in Stay online company dispute.

Court stops a transfer of Sh 74Million legal fees in Stay online company dispute.

by Robert Guyana

Court stops transfer of Sh74million to lawyers representing trader in company dispute against investor

The High court has temporarily issued a stay order stopping the implementation of a consent that directed a bank to transfer Sh74million as legal fees to lawyers representing a businessman in Sh400million company dispute.

Justice Alfred Mabeya on Wednesday granted the orders sought by a Rwandese investor Desire Muhinyuza through his lawyer Danstan Omari when the case came up for directions.

“Pending hearing and determination of the case, court issues an order on injunction temporarily staying the implementation of the consent orders issued on October 30, 2023 directing the manager of United Bank of Africa Westlands branch to transfer from Stayonline Limited US dollar account the sum of Sh35.5million plus the accrued interests to Omwanza and Areba associates advocates and thr sum of Sh38.8million plus accrued interests to Ivy Ateko Ingati respectively”, the judge ordered.
The court directed the respondents to file their responses within 14 days.
The case will be mentioned on February 16.

Last week, investor Desire Muhinyuza filed an application accusing businessman Kirimi Koome’s advocates of fraudulently obtaining a consent from court to be paid Sh 74 million in legal fees.

In the application filed at Milimani court,  Muhinyuza through his lawyer Danstan Omari claim Koome’s lawyers Omwanza Nyamweya and Ateko Ingati fraudulently obtained the consent when they knew the ownership dispute was still pending in court.

Omari claims that the consent was stage managed by Koome’s two lawyers alongside one Raphael Olwako on behalf of Stayonline company.

He wants the court to review the consent informing court that Olwako is not the director of the company in question and it was all a scheme to unlawfully withdraw the money held by the company in the guise of legal fees.

According to court papers, Omwanza and Ateko failed to disclose to court that there were proceedings active in court on the ownership dispute between Desire and Koome.

“The impugned consent order was obtained without the lawyers making material disclosure to the court as to the status of Stayonline Ltd and that these proceedings were commenced in bad faith with ill intention of unlawfully utilizing funds amounting to Sh 74,300,00 held in Stayonline’s bank accounts at UBA” Omari claims in court papers.

On December 27, the High Court declared that a Sh400 million disputed fintech firm belongs to a Rwandese investor.

The court said Desire Muhinyuza was the legit owner of Stay Online Limited (SOL).

“Accordingly, I find and hold that the 1st plaintiff (Muhinyuza) is the beneficial owner of the company. The 1st defendant (Kirimi Koome) committed a fraud by not filling the form for beneficial ownership properly at the time of the incorporation of the company,” Justice Alfred Mabeya said in his judgement.

The judge ordered Koome to pay back $100,000 (Sh15.6 million), which he is said to have received from the Rwandese investor for tax purposes but never paid.

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