The High Court in Nairobi has issued a landmark order freezing over Ksh.135 million held in the bank account of an Egyptian national residing in Kenya. The funds, housed in Diamond Trust Bank (DTB), are at the center of a legal battle involving allegations of fraud leveled against the businessman by a foreign investor.
According to court filings, the freeze was ordered to prevent any withdrawals or transfers of the money pending the hearing and determination of the case. The court explicitly stated:
“That pending hearing and determination of this application an order freezing the respondent’s account held in any Kenyan financial institution, specifically at Diamond Trust Bank, and any other accounts identified in the course of investigations.”
Fraud Allegations in Real Estate Deal
The Egyptian national stands accused of defrauding a foreign investor of over Ksh.135 million, approximately USD 1,040,000, in a real estate scheme gone awry. Represented by lawyer Danstan Omari, the complainant alleges that he was lured into the deal by promises of lucrative residential and commercial property developments under the management of AAD Real Estate, a company linked to the accused.
The investor claims that the businessman promised to deliver the projects by December 2023. However, as the deadline nears, the properties remain incomplete, and there are no signs of progress at the sites, which he described as “ghost towns.”
In his court submission, the investor stated, “We trusted him, but he not only became hostile, he has refused to refund the monies he obtained to date, a sum of USD 1,040,000.”
Legal Steps Taken
Faced with mounting frustrations and unfulfilled promises, the investor turned to the Directorate of Criminal Investigations (DCI), urging them to probe the businessman’s dealings. The investor’s lawyer emphasized that their client had engaged the accused in good faith, believing the real estate venture would yield the promised returns. Instead, the project’s stagnation has prompted allegations of misappropriation of funds and fraudulent activity.
The court order is a crucial step in ensuring the funds remain secure during investigations. It further directs the DCI to identify and freeze any additional accounts linked to the accused that may have benefitted from the alleged fraud.
Broader Implications for Foreign Investors
This case raises concerns about the safety and transparency of investing in Kenya’s real estate sector. While Kenya has long been viewed as a hub for real estate investment due to its growing economy and urbanization, cases of fraud and mismanagement have occasionally tarnished the industry’s reputation.
Legal expert Danstan Omari noted that this case could serve as a warning to both investors and entrepreneurs. He advised investors to conduct thorough due diligence before committing to large financial ventures, especially in industries prone to scams.
“This case underscores the importance of transparency and legal safeguards in investment transactions. The judiciary and investigative agencies must work diligently to ensure justice is served,” Omari said.
Next Steps in the Case
With the funds frozen, the businessman is expected to respond to the allegations in court. Meanwhile, investigators will continue to examine his financial dealings to determine the full extent of the alleged fraud. The court has also warned against any attempts to tamper with evidence or assets connected to the case.
The hearing and determination of the matter are now eagerly awaited, as the outcome could set a precedent for handling similar cases of alleged financial fraud in Kenya. For the investor, securing the frozen funds may mark the first step toward recovering his lost investment.
