KCB Group has filled a multi-million shilling claim against stock brokerage firm Suntra over the incompetent purchase of Safaricom shares during the telecommunication company’s IPO in 2008.
The case becomes the third that KCB has filed against Suntra arising from the Safaricom IPO with each suit having different claims. The present demands a refund of sh22.2 million and interest dating back five years for share purchase orders, which Suntra Investment Bank failed to hour.
The lender stated that 165 clients had borrowed cash to buy Safaricom shares, money that was paid directly to Suntra but the stockbroker failed to deliver on the order. KCB was to receive the applications for the shares and forward the same to Suntra for purchase of the shares on behalf of the clients.
The bank claims it was only an agent of Suntra and its role was to receive the applications and the deposit for onward transmission or alternatively to advance loans to the applicants, Suntra has however failed to account for the cash.
KCB Group last year filed a claim against Suntra seeking a refund of sh10 million after the firm failed to buy Safaricom shares on behalf of its client Magic Movers, which had borrowed the money from KCB to buy the shares through Suntra, that allegedly failed to forward the share allotment form together with the money to Citi Bank the receiving lender.
The first suit in 2012 demanded Suntra a refund of sh50 million paid on behalf of KCB’s client whom the investment bank failed to refund fully. The investment bank is also alleged to have retained sh24.7 million belonging to an individual who bought the shares through them worth sh117 million.