In what seems as the end of the road for boss of Savannah Clinker company Benson Sande Ndeta, he was yesterday arrested in connection with a Sh700 million fraud and forgery at the company.
Charges
The Director of Public Prosecutions (DPP) in a letter to the Directorate of Criminal Investigations (DCI) directed that Ndeta and his co-accused, Charles Hill Jnr, be charged with eight counts including forgery, conspiracy to commit a felony contrary to section 393 of the Penal Code; Conspiracy to defraud, and making a document without authority.
The two are also to face charges of obtaining execution of a security by false pretenses, obtaining registration by false pretenses, obtaining credit by false pretenses and uttering false documents.
The DPP noted that there was no doubt that Ndeta and Hill Jr. not only irregularly and illegally signed the corporate guarantee documents in a manner that clearly amounted to a forgery, but also presented the said documents to Absa Bank, which relied on the forged documents to approve and release to them the facility sum of USD35 million.
Charles Hill Jr Extradition.
Hill Jr is an American and is currently based in the US’ State of Delaware.
“Upon charges, a warrant of arrest shall be issued and an extradition request shall be made to competent authority of the USA for the surrender of Charles Hill Jr from the USA to Kenya to face the said charges,” Senior prosecutor Jacinta Nyamosi wrote to the DCI in a letter dated November 25.
The DPP further directed that upon charges, a warrant of arrest be issued and an extradition request be made to the competent authority of the USA for the surrender of Hill Jr. from the USA to Kenya to face the said charges.
“A further Mutual Legal Assistance request may be made for assistance in further investigations including to obtain Charles Hill Jr’s specimen signatures, handwritings for purposes of further forensic investigations, and the recording of notarized statements touching on the subject matter.”
Politics
This arrest has unearthed political ties as top Azimio leaders led by Kalonzo Musyoka and Eugene Wamalwa visited Muthaiga police station to seek for his release on bond.
Boardroom wars.
According to the investigations by the DCI, the acquisition by Ndeta of the 4,500 in Savannah Cement resulted in directors Donald Mwaura Kiboro and John Gechanga becoming minority shareholders in Savannah Cement.
This led to boardroom wrangles and rivalry within the company as a result to which the two did not attend board meetings, a fact which made the confirmation of minutes and approval of board resolutions impossible.
The investigations found out that pursuant to an approval by the Board of Directors of Savannah Heights in a meeting held on November 16, 2017 and attended by the two directors but not Ndeta, Kiboro transferred 300 of his shares in Savannah Heights to Falcox Ventures Holdings LLC, represented by Hill Jr. for a consideration of Sh700 million.
Ownership of Savannah Cement.
Initially, Savannah Cement was owned by a group of Kenyan and Chinese investors. Kenyan firm Savannah Heights owned 40 per cent while Chinese investors through Wanho International and Acme Wanji Investment owned 60 per cent of the cement maker.
Savannah Heights was owned by Ndeta (35 per cent), Gachanga (35 per cent) and Mwaura (30 per cent). The squabbles began in 2014 when the Chinese firms exited and sold their stake to Seruji, owned by Ndeta and saw him emerge as the majority shareholder in Savannah Cement.
“The purchaser defaulted in payment of the purchase price, whose last payment date was 2nd February 2018, as a result of which the share sale/purchase between Kiboro (seller) and Falcon Ventures Holdings LLC (the purchaser) fell through. There was thus no transfer of shares in favour of Charles Hills Jr,” the investigations files state.
In was further established that around 2017, the management of Savannah Cement through Ndeta, in a confidential information memorandum submitted to Barclays Bank of Kenya Limited applied for the financing of the Savannah Cement’s factory’s expansion project for a sum of USD 35 million.
The probe shows the bank through offer letters dated October 4, 2017 addressed to the Director of Savannah Cement agreed to finance the factory’s expansion project.
The offer letters were to be executed by the directors/shareholders of the two corporate entities owning Savannah Cement; Savannah Heights and Seruji as guarantors to the facility
“Despite the foregoing, and the fact that Charles Hills Jr vas not lawfully authorised to transact any document on behalf of Savannah Heights, he fraudulently executed six security documents purporting himself as a Director/ Chairman of Savannah Heights offering corporate guarantee the loan facility of USD 35 million granted by Barclays to Savannah Cement,” the report further states.
It adds: “Charles Hills Jr purportedly signed the said corporate guarantee documents in a criminal conspiracy scheme with Ndeta who knew his partner Directors/shareholders in Savannah Heights were Kiboro and Gachanga and not Charles Hills Jr, the documents were accordingly a forgery.”
Bamburi Cement Buy Out
Ndeta’s company is the leading bidder in the pending buyout of Bamburi Cement company and had promised to pay Sh25.42 billion for Bamburi’s entire stake, which is Sh1.81 billion more compared to the Sh23.59 billion that Amsons had offered.
In its competing offer, Savannah Clinker said it would pay Bamburi’s shareholders Sh70 per share, which is Sh5 more than the Sh65 per share offer made by Amsons.
Both prices are premium on the current share price of Sh64.50 a share and Sh42 per share in July when Amsons made its offer.
Ndeta, listed as the owner and executive chair of Savannah Clinker, was the majority shareholder of the troubled Savannah Cement until July last year when it was placed under administration.
The administrator has recently started the process of selling its assets to recover money owed to KCB Group and Absa Bank Kenya.
In the offer to Bamburi, Ndeta said he is in the process of exiting as director of Savannah Cement. Amsons had earlier said it had received an irrevocable undertaking from Bamburi Cement’s major shareholder, Holcim.
“Savannah Clinker Limited (the competing offeror) notifies the public that it has on August 27, 2024, served Bamburi Cement with a notice of intention to acquire up to 100 per cent of the ordinary shares on Bamburi,” said Savannah Clinker in the notice published in the dailies.
“The competing offer price will be Sh70 for each ordinary share of Bamburi.”
The firm noted its offer was a premium of 64.55 per cent on Bamburi shares over the last 30 days when it traded at an average of Sh42.54.
Bunge la mwananchi stand on Ndeta’s Bid.
According to the Bunge La Mwananchi, in a letter dated November 22, both the offer by Savannah Clinker and the credibility of GIFDA are questionable and that in the end, small shareholders within Bamburi Cement might miss out from the sale and their voices might never be heard.
“GIFDA claims a non-profit organization focused on human trafficking prevention but simultaneously presents itself as a major infrastructure financier. Yet no evidence exists of completed projects such as Port of Trajan, Port of Ostia, and Port of De Claudius, which it claims to have funded,” said Francis Awino, the President of Bunge La Mwananchi.
From the letter, the Bunge members raised questions on the real faces behind the ownership of GIFDA given that none of the directors or management have been made public. The members said this raises serious transparency and integrity questions.
Bunge La Mwananchi also wanted to know why GIFDA had not provided all the required information as stated in the law. They also wanted to know the role of Faida Investment Bank in the whole transaction process and how it vouched for GIFDA without what is clearly a massive lack of due diligence.
The letter top the CMA also came after a surprise move of bank accounts belonging to Savannah Clinker from Stanbic Bank Kenya to NCBA Bank “which is a loud alarm bell.”
They also raised questions about the reputation of Benson Ndeta, the man behind Savannah Clinker. “Benson Ndeta has a history of mismanagement, including running two Kenyan cement manufacturers into distress.”
Reputation of Benson Ndeta has now been exposed after that this arrest for fraud and stands no chance of bouncing back. The cat is out the bag and chicken have roost.
KenyanHour 