Kenya Commercial Bank (KCB) has filed a suit for KSh22.2 million (US$255,000) against stock brokerage firm Suntra Investment Bank over the buying of shares during mobile operator Safaricom’s initial public offering (IPO) in 2008.
Business Daily reports KCB is seeking a refund and interest accrued over five years for share purchase orders it claims Suntra did not honour.
KCB says the role of the investment bank in April 2008 was to promote as well as facilitate both clients and the public in the Safaricom IPO. A total of 165 clients borrowed from KCB to buy the shares, but Suntra failed to deliver on the order.
“The plaintiff’s claim as against the defendant is for Sh22,188,500, being the amount due and owing from the defendant for shares applied and not allotted to the various clients some of which were financed by the plaintiff full particulars of which the defendant is fully aware,” said KCB in court documents.
KCB said it had been tasked with receiving the applications and forwarding them to the investment bank, which would then buy the shares for the clients.
It is alleged Suntra Investment Bank allocated the shares and refunded the remaining amount not used for buying shares. The agreement between the two parties however necessitated all refunds be remitted to clients’ accounts at KCB to be paid to those who had deposited money with the bank or to offset the loans.
KCB is claiming Suntra has not refunded the cash or explained how it was utilised, which has led it to file the suit at the Milimani law courts.
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