Rwandan tobacco tycoon Tribert Ayabatwa Rujugiro has filed a multi-million shilling suit against Kenyan investment bank Dyer & Blair, accusing the broker of selling his Safaricom shares and failing to speedily pass on the sale proceeds to him.
Mr Rujugiro wants Dyer & Blair ordered to pay him damages for withholding proceeds of the share sale for 135 days, and for paying him after fluctuations of the US dollar rate negatively affected his returns.
The Rwandan tycoon bought his 8.8 million Safaricom shares in 2008 for $1 million (then equivalent to Sh61.4 million) through Dyer & Blair, but ordered the lender to sell the stocks in 2013.
Dyer & Blair fetched Sh85.7 million, but withheld the sum for 135 days, before converting it to $989,631. Mr Rujugiro now says the Kenyan shilling strengthened against the dollar during the withholding period, a move that cost him substantial loss.
The businessman is claiming $577,000 (Sh57 million) in special damages, and has also asked the court to award him an unspecified amount in general damages.
Mr Rujugiro says he lost a chance to re-invest the proceeds of the share sale in the international stock market because of Dyer & Blair’s move to hold his funds.
Dyer & Blair has responded that the withholding of Mr Rujugiro’s funds was to enable the broker comply with the know your customer (KYC) obligations adding that it was forced to hold onto Mr Rujugiro’s proceeds after discovering that the tobacco tycoon had been exiled from Rwanda and that the government had seized a number of his assets in Kigali worth millions of dollars.
Dyer & Blair says it asked Mr Rujugiro to appear before its managers in Nairobi to prove that the sudden change in personal details were not part of an identity theft scam.
The tycoon’s agent, Chris Brown, has claimed in court papers that a senior Dyer & Blair manager admitted during a meeting that the actual reason for withholding Mr Rujugiro’s funds was pressure and coercion from the Rwandan government.
Mr Brown says Paul Nyaga, a deputy manager at Dyer & Blair, told him that the Rwandan government had indicated that it would make business conditions difficult for the investment bank in Kigali if it did not obstruct payment to the tobacco billionaire. The threats were allegedly issued to Dyer & Blair chairman Jimnah Mbaru.
Dyer & Blair holds that the instructions Mr Rujugiro issued in 2013 to sell the shares had come from a different email address and the passport details provided differed from those in Dyer & Blairs records, prompting it to withhold the sale proceeds.
“The general conduct of Dyer & Blair on my portfolio was negligent. Dyer & Blair was enjoined by regulations of the Capital Markets Authority to deposit the sale sum in an interest earning account immediately after liquidation of my shares. The defendant was also enjoined to convert the sale sum when the dollar rate was Sh85.47 instead of converting when the rate was Sh86.6,” Mr Rujugiro says.