[2012] KEHC 1247 (KLR)

REPUBLIC OF KENYA

High Court at Nairobi (Nairobi Law Courts)

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DATAGRUAD DISTRIBUTORS LIMITED:::::::::::::::::::::::::::::::::::::::::::PLAINTIFF

- VERSUS -

VIRGINIA NJERI KIGO:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 1ST DEFENDANT

VALZ DISTRIBUTORS:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 2ND DEFENDANT

VIDI FABRICATORS LIMITED::::::::::::::::::::::::::::::::::::::::::::::: 3RD DEFENDANT

NARIBOI TYRE MART COMPANY LIMITED::::::::::::::::::::::: 4TH DEFENDANT

R U L I N G

1. The Notice of Motion application before the court seeks the following orders:-

1. That the Applicant be certified as extremely urgent and one deserving to be heard ex-parte in the first instance.

2. That this Honourable Court be pleased to direct the 1st Defendant within 2 days to furnish security in the sum of Kshs.43,000,000/= that would be sufficient to satisfy a decree that may be passed against her.

3. That this Honourable Court be pleased in the absence of security as prayed for in 1 above, to order the immediate attachment before judgement of the following properties, that is to say:-

a.Motor vehicle Number KBQ 019Q – Toyota RAV4 which is yet to be registered in her name, bought at Kshs.2,850,000/=.

b.Land Parcel Number Nairobi/Block 76/516 – Buruburu registered in her name bought for Kshs.9,000,000/=.

c.Assorted motor vehicle tyres stored at a godown along Mombasa stored therein under the name of the 4th Defendant as well as others destined to Kenya from China now at the High Seas, all valued at an estimated sum of Kshs.12,980,000/=.

d.Assorted beauty products at the 3 Valz Beauty Shops in Buruburu Shopping Centre, Kiambu Town along Kang’undo Town.

4. That in the alternative to prayer 3 above, the Honourable Court be pleased to appoint a Receiver over all the Properties listed under prayer 3 above and remove the 1st Defendant from the possession and custody of the same being the most just and convenient way to secure them.

2. The application is filed under Order 39 Rules 5 (1) and 6, and Order 41, Rule 1 (1) of the Civil Procedure Rules, 2010 and Sections 63 (b) and (d) of the Civil Procedure Act (Cap 21) Laws of Kenya and all other enabling provisions of law.

3. The application is based on the grounds set out therein and is supported by affidavit of MR. JAMES KINYUA who described himself as the Managing Director of the Plaintiff’s Company.

4. The brief history of the matter is alleged in the pleadings herein are that the Plaintiff was incorporated in January 2012, as a Limited Liability Company and prior to that and more specifically in the years 2010 and 2011, its business was been carried on by a partnership trading under the name of DATAGUARD COMPANY and the Plaintiff as such is the Successor of the Partnership business and the Plaintiff absorbed all the affairs of the partnership.

At all material relevant times herein the Plaintiff was therefore a business entity engaged in the provision of internet security software – KASPERSKY by packaging the same in Compact Disks (CDS’S) and thereafter distributed in that form and the 1st Defendant was the accountant in the Plaintiff’s company as well as the Plaintiff’s predecessor and in that capacity, she was in charge of raising delivery notes and sale invoices, collecting and banking cash as well as cheque payments and raising customer payment statements among other duties as would be assigned by the company.

On diverse dates in the months of June 2011, and July 2012, the 1st Defendant as the accountant of the Plaintiff and its predecessor was involved in financial irregularities, fraudulent dealings and misappropriation of funds as a result of which she caused the Plaintiff to suffer loss now verified to amount to Kenya Shillings forty three milliononly(Kshs.43,000,000/=) and which money the Plaintiff now claims from the Defendants jointly and severally.

Particulars of fraud and misappropriation of funds by the 1st Defendant:-

(a)Purposely and deliberately manipulating the ACCOUNTING System to conceal loss of funds by substituting the letter “O” instead of Number Zero (0) in the computer systems.

(b)Purposely and deliberately failing to document normal accounting transactions that is to say, failing to raise delivery notes, sale invoices as well as receipts in order to conceal loss of funds.

(c)Failing by design to bank company funds in the ordinary course of business, money coming into her possession by virtue of employment through payments made by respective customers, and channeling the same to her personal accounts.

(d)Generating and sending wrong statements of account to customers with information which was inconsistent and at variance with the records in the accounting system.

(e)Failing to post receipt of money received in the system and deleting data in the accounting system to conceal the financial irregularities.

Wrongfully and in breach of her express terms of engagement as an accountant, the 1st Defendant failed:-

(a)To render the true and full account expected or any account to the Plaintiff or at all and,

(b)To hand over to the Plaintiff the payments achieved on any sale of the CD’s, and,

(c)To return to the Plaintiff any of the stolen funds upon demand for reimbursement.

The Plaintiff avers that at the time of leaving employment in July 2012, the Defendant was earning a monthly gross salary of Kshs.150,000/= and which she earned for only 6 months and prior to which she earned a salary of Kshs.170,000/= for only one (1) month i.e. January 2012 before which she was earning a gross monthly salary of Kshs.75,000/= and which she had earned for the previous seven (7) months thereby making the total gross salary earned by the Defendant during her period of employment with the Plaintiff i.e. June 2011toJuly 2012 as Kshs.1,595,000/= less taxes which were payable as well.

That after she left employment, it was discovered that there had been some financial irregularities and as such, the Plaintiff commissioned an audit to be carried out and which was done and a report made which unearthed that during her period of employment, the Defendant had stolen from the company a total of Kshs.43,000,000/=on diverse dates between June 2011 and July 2012.

That the audit was more precipitated by the conflict between statements given to clients by the 1st Defendant and those in the accounting system who at the time of leaving employment was earning a gross salary of Kshs.150,000/= monthly but also whose status in life was during that short period completely incompatible with the income she earned.

That following the Audit analyses that established the extent of loss sustained, the company commissioned a thorough investigation into the lifestyle of the 1st Defendant and it is from the investigation that it was discovered that during the same period, the 1st Defendant had formed and promoted the 3rd and 4th Defendants and has been channeling the Plaintiff’s stolen funs to the 2nd, 3rd and 4th Defendants, where she had been investigating the stolen funds to cover up her dirty antics.

That with the money stolen, the Plaintiff was able to trace the channel through which the money was applied by the 1st Defendant and which established inter-a-alia that:-

(a)She was in the business of importing assorted tyres for sale and had a godown along Mombasa Road fully stocked with tyres estimated at a value of Kshs,8,000,000/= and with a consignment in the High Seas destined for Kenya from China in her name ordered at a cost of USD60,000.

(b)She has 3 fully stocked Beauty Products Shops, one at Buruburu Shopping centre, another at Kiambu Town and one along Kang’undo Road under the 2nd Defendant’s name with stock valued at millions of shillings.

(c)She has during same period acquired a brand new Toyota Rav4 vehicle registration no. KBQ 019Q at a cost of Kshs.2,850,000/=.

(d)That she had during same period acquired a property (free of loan), being Land Reference No. Nairobi/block 76/516 at a consideration of Kshs.9,000,000/=.

That beyond doubt, the Plaintiff had established that the 1st Defendant had been involved in mega financial impropriates during her period of employment and had managed to hide it manipulating the accounting system in the Plaintiff company.

That the 1st Defendant has since been charged with the offence of stealing by servant after thorough investigation done by the police and as a result, the 1st Defendant has started to dispose of her properties in order to conceal and/or defeat and obstruct justice.

5. The application was not opposed even though it was served upon the Respondents, and an affidavit of service filed in court on 16th October 2012.

6. I have carefully considered the application. At this stage, the Applicant merely needs to show to me that it has a prima facie case capable of succeeding at the full trial of the issues raised in the Plaint.

As it is, the application is not opposed. Further it appears to me merited, and the Plaintiffs fears are very well founded. In my view the Applicant has satisfied all the three principles set out in Giella – Vs – Cassman Brown Case.

7. In the upshot I order and direct that the 1st Defendant do furnish security in the sum of Kshs.43,000,000/= as prayed for under Prayer 2 of the Application, within 7 daysof this Ruling failure to which I order and direct an attachment before judgment of the properties mentioned in Prayer 3 of the application.

The costs of this application shall be for the Applicants.

It is so ordered.

DATED, READ AND DELIVERED AT NAIROBI

THIS 6TH DAY OF NOVEMBER 2012

E. K. O. OGOLA

JUDGE

PRESENT:

Gachie for the Plaintiff

N/A for the Defendants

Teresia – Court Clerk