A man arrested over a bitter dispute regarding the ownership of Ridgeways Inn-The Yard on Kiambu Road finds himself in double trouble after Denmark’s Embassy in Kenya on November 7 accused a micro finance institution owned by him of defrauding a Danish based micro-lender Ksh120 million.
Daniel Kimani Kariuki, who has sued his fiancée Sylvia Wambui Karanja for fraud in relation to the property is in the soup after the embassy wrote to the Directorate of Criminal Investigations (DCI) Banking Fraud Investigation Unit calling for speedy investigations into the matter.
Mr. Kariuki is the owner of Kiambu based Kenya Entrepreneurship Empowerment Foundation (KEEF) which is being accused of defrauding Danish micro-lender MYC4 Ksh120 million meant for lending to Small and Medium Enterprises (SMEs).
“It has come to the attention of the Royal Danish Embassy in Kenya that Danish micro-finance provider MYC4 A/S is involved in a legal dispute with one Mr. Daniel Kimani, a Kenyan citizen. Mr. Kimani is suspected of fraud and investigations are ongoing.” reads part of the separate letters written to DCI honchos and the Banking Fraud Investigating Unit. The two letters are dated October 27, 2015.
In a third letter to Mr. Kariuki’s lawyers E.M Washe & Associate Advocates, Denmark in Kenya has asked Mr. Kariuki to present himself at the country’s embassy in Nairobi to provide a specimen of his personal signature as investigations into the matter gather pace. The signature will allow the investigating parties to compare signatures in documents that are key to cracking the case.
The letters say the Danish Embassy is following the matter closely and supports its conclusion in line with Kenyan laws.
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“We note that DCI is involved in the settling the case,” the letters adds.
According to MYC4’s Chief Executive Mads Kjaer, KEEF received Ksh120 million from MYC4 which the Kenyan micro-lender was supposed to loan to farmers and small traders but KEEF has thus far refused to pay back the loan.
Headquartered in Denmark, MYC4 is an online firm that facilitates foreign investors to offer loans to SMEs in Africa.
The Ksh120 million in question is a sum of the loans and accrued interests that MYC4 investors have extended to 23,000 clients through KEEF.
“Danish investors have lost money because KEEF has refused to repay the funds. This scandal could have adverse effect on the local microfinance industry and deny Kenyan businesses much need credit,” said Mr. Kjaer.
MYC4’s CEO added “KEEF has refused to honour its contractual obligations to remit the loan repayment monies to MYC4 accounts despite repeated prodding and attempts to resolve the matter amicably.”
Business Today has learnt that the Danish micro-lender has halted extending more financial support to local enterprises after growing frustrated with the slow pace at which the matter is being handled at the Kenyan courts.
MYC4 went into an agreement with KEEF in 2011 that stipulated that the latter would be advancing loans ranging from Ksh10, 000 to Ksh1 million to Kenyan enterprises on its behalf.
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The loans, according to MYC4, are sourced from investors across the world and accessed by local enterprises through an online platform.
The provider and loan administrator contract shows that KEEF acted as the loan administrator, effectively making it the link with all the borrowers.
KEEF is based in Kiambu but also operates in Nairobi, Central, Eastern and Rift Valley provinces and focuses on agriculture.
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