Grain Bulk Handlers, a prominent company associated with Mombasa-based tycoon Mohammed Jaffer, has found itself at the center of a legal storm after failing, for the second time, to attend a court hearing.
The case revolves around allegations from Atta Ltd, a grain company, that Grain Bulk Handlers illegally auctioned its wheat, valued at Ksh 730 million, without proper authorization.
The ongoing legal battle underscores the seriousness of the allegations, as the purported auction price fell significantly short of the wheat’s market value, raising questions about the legality and ethics of the sale.
The recent court session, presided over by Mombasa High Court Judge Florence Macharia, was set to address the lawsuit.
However, it could not proceed after Felix Keating, the legal representative for Grain Bulk, failed to appear in court, allegedly due to a relative’s funeral. Despite this claim, suspicions arose regarding the legitimacy of this excuse.
Judge Macharia, in response to the absence, expressed frustration, particularly after learning that the firm’s counsel had allegedly fabricated the death of a family member to justify non-appearance.
The court made it clear that no further leniency would be granted to Grain Bulk’s legal team, and Judge Macharia firmly warned, “It is too unfortunate that someone can fake the death of a relative; if he doesn’t appear next time, I will enter a judgment in favour of the petitioner.”
This decisive stance places increased pressure on Grain Bulk to attend future proceedings or face a default judgment.
The lawyer representing Atta Ltd, Ochieng Odipo, pointed out to Justice Macharia that this marked the second instance in which Grain Bulk’s counsel had failed to appear in court, causing delays in the legal proceedings.
Odipo took the opportunity to request reimbursement for Atta Ltd’s travel expenses, which had been incurred as a result of these repeated absences.
The legal team for Atta Ltd is evidently frustrated, as they had hoped to resolve the matter promptly, given the financial stakes involved.
At the heart of the case lies a business agreement between Atta Kenya Limited and Louis Dreyfus Company Limited (LDCL) for the purchase of 38,500 metric tons of milling wheat.
The deal stipulated that 29,500 metric tons would be delivered to Atta Kenya, with the company making a payment to LDCL amounting to $7.565 million (Ksh 1.1 billion) in June 2014.
Despite fulfilling its financial obligations to LDCL, Atta Kenya reportedly struggled with additional costs, including customs duties and storage fees, payable to both the Commissioner of Customs and Border Control and Grain Bulk Handlers.
As the financial difficulties mounted, Atta Kenya’s situation deteriorated.
Before a resolution could be reached regarding the outstanding payments, the company received a letter notifying it that Beyond Auctioneers had sold the wheat consignment to Grain Industries Ltd.
The sale price, Ksh 217.48 million, was far below the wheat’s market value of Ksh 730.3 million.
This drastic discrepancy prompted Atta Kenya to take legal action, arguing that the wheat had been auctioned at an unjustifiably low price, and questioning the legitimacy of the sale process.
Two witnesses from the sued entities were summoned to testify, facing questions regarding the auction process.
They were specifically asked to explain how the auction price was determined and to identify the individuals or authorities who had authorized the sale.
This line of questioning suggests that Atta Kenya’s legal team is intent on uncovering any potential improprieties in the handling of the wheat consignment.
Mila Bwire, another lawyer representing Atta Kenya, pursued further clarification about the events leading up to the sale of the wheat, particularly concerning the circumstances under which the consignment was placed under receivership.
Bwire’s questions appear to focus on the legal and procedural aspects of the sale, aiming to establish whether Atta Kenya’s wheat was disposed of fairly and in accordance with the law.
The case has now been adjourned, with the court setting a new mention date for November 12, 2024.
At that time, Grain Bulk Handlers is expected to attend and provide answers to the allegations leveled against it.
Judge Macharia’s warning leaves little room for further delay, signaling that the court is prepared to take decisive action should Grain Bulk’s legal team fail to appear once again.
This high-stakes lawsuit has captured major public attention, not only due to the substantial financial value involved but also because of the ethical and procedural questions it raises.
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