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Kenyan firm dumps Quality Group over sleaze allegations: Dar company seeks legal inte

Discussion in 'Habari na Hoja mchanganyiko' started by BAK, Feb 5, 2009.

  1. BAK

    BAK JF-Expert Member

    Feb 5, 2009
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    Kenyan firm dumps Quality Group over sleaze allegations: Dar company seeks legal intervention

    Nairobi ​

    KENYA’S General Motors Limited company has decided to terminate a major business contract with the Dar es Salaam-based Quality Group Limited in the wake of concerns over a number of serious issues of credibility facing the local company’s prominent chief executive officer, Yusuf Manji.

    A lawyer representing the Nairobi-based General Motors, Julius Kimboy, told the Kenyan Commercial Court that his client had opted to severe its business ties with Manji’s company on the basis of the various allegations against the controversial businessman.

    According to Kimboy, the contract between General Motors and Quality Group clearly specifies that serious criminal allegations being brought against a principal official of either company will be considered sufficient grounds for contract termination.

    He said the business agreement between the two companies was categorical on this matter.

    As such, advocate Kimboy requested Justice Lesiit of Kenya’s Commercial Court to dismiss an application for a court injunction filed by Quality Group lawyers that seeks to challenge General Motors’ decision to terminate the contract.

    It is understood that the contract between Quality Group and General Motors Ltd was effectively terminated on January 2 this year.

    However, on January 7, Quality Group sought to challenge the move by applying for a temporary injunction through its own lawyer, Otiende Amollo.

    Among arguments put forward by Quality Group’s lawyers in application number HCCC/30/09 asking the Kenyan Commercial Court to reverse the contract termination is that the Kenyan company allegedly made the decision abruptly and without prior notice or consultation with the Dar es Salaam firm.

    It was further argued in the same application that Quality Group could end up losing assets worth 1.3 billion Kenyan shillings (approx. 24bn/-), plus a daily profit of around 30 million/-.

    Quality Group lawyers also claim that the move by General Motors will put at least 40 jobs at risk, as well as affect repayment of a business loan.

    Responding to the arguments put forward in the application, General Motors counsel Kimboy sought to emphasize that the contract between the two companies explicitly states that any allegations of corruption, misappropriation, dishonesty, or tax evasion against principal officers of either firm should automatically lead to termination of the contract.

    Since Manji is CEO of Quality Group and currently faces various serious criminal allegations in Tanzania, the Kenyan company said it had rightly made use of this provision in the contract to effectively cut business links.

    Argued Kimboy in court: ’’In his sworn affidavit, Manji has failed to explain or defend himself against these allegations facing him in Tanzania, including corruption, tax evasion and others.’’

    It is understood that General Motors Ltd entered into a five-year contract with Manji’s company on August 17, 2005, involving the purchase of vehicles and spare parts from the Kenyan company.

    Quality Group lawyers have continued to maintain that the contract was wrongly terminated, without their client being given any notice.

    The Kenyan court is scheduled to issue a ruling on the commercial dispute on Friday of next week (February 13).