NSSF fights Shah Munge court bid to block shares sale

The National Social Security Fund (NSSF) wants the High Court to disregard an application by collapsed stockbroker Shah Munge that seeks to block the sale of its Nairobi Securities Exchange shares to settle Sh258 million it lost in the 2002 Eurobank scandal.

Shah Munge returned to the High Court in September to block an attempt by the pension scheme to sell its NSE shares, arguing that it had already notified the Court of its intention to appeal a 2009 judgment in which Justice Luka Kimaru ruled that it compensates NSSF the monies it lost in the scandal.

NSSF on Wednesday told the court that the stockbroker was yet to lodge its appeal five years after the judgment was delivered, which it argues should be considered an abandonment of the appeal.

It has further accused Shah Munge of using the application to frustrate NSSF’s attempt to recover the colossal sum, which could rise to over Sh1 billion with accrued interest.

READ: Shah Munge fights fresh NSSF bid to seize its property

NSSF claims that Shah Munge is buying time to sell the only assets it is known to have, so as to dodge payment of the sum it was ordered to pay to the pension scheme.

“There has been an inordinate delay in lodging the appeal. By selling and disposing of all its attachable assets before paying the decretal sum, Shah Munge has stolen a march over the process of the court and thereby obstructed justice in this case,” said Desterio Oyatsi, NSSF’s lawyer.

Mr Oyatsi added that the shares, estimated to be worth Sh75 million, are not enough to settle the debt owed to it, and that his client could lose the only known asset of the fallen stockbroker.

The stockbroker’s application had been supported by another firm, Southern Bell, which has laid claim to 10 per cent stake in the total shares owned by Shah Munge.

Southern Bell also wants the sale of the assets frozen until the court determines whether its claim of 1.5 million shares registered to Shah Munge is legitimate.

The firm has said in court papers that it bought 300,000 shares from the stockbroker in 2011 for Sh13 million, which have since matured into 1.5 million shares that it stands to lose if NSSF is allowed to proceed with the assets sale.

Southern Bell holds that it had been unable to register the transfer of the shares because of regulations at the NSE which were only relaxed in April this year, by which time NSSF had already secured an order barring the transaction.

Lady Justice Jacqueline Kamau will mention the matter on October 28 to verify if the parties have filed their respective arguments.