Auctioneers descended on National Cereals and Produce Board (NCPB) on Thursday sent by a maize supplier to collect Sh923 million — even though he did not supply a single grain.
Mr Jacob Juma, of Erad Supplies & General Contractors, was awarded the money through an arbitration process after he sued NCPB for breach of contract.
He was represented in the transaction by Nancy Baraza & Company, the former firm of suspended Deputy Chief Justice Nancy Baraza.
The auctioneers raided the NCPB headquarters and confiscated property of unknown value, including four vehicles, office equipment and furniture.
A brawl, complete with stone-throwing, ensued with NCPB staff accusing the auctioneers of attaching their personal effects.
Police, commanded by city boss Anthony Kibuchi, stepped in and ordered the auctioneers to halt the exercise.
“This exercise has been stopped until clear directions are given,” Mr Kibuchi told the auctioneers.
The NCPB later in the day obtained temporary orders stopping the auctioneers from attaching the property until their appeal is heard and determined.
Erad signed an agreement with NCPB to sell it 40,000 tonnes of maize after grain reserves were depleted by drought.
The Ministry of Agriculture terminated the contract and Erad sued the cereals board for breach of contract.
It ended in arbitration by Mr Evans Thiga Gaturu who ruled in favour of Erad in July 2009.
NCPB went to court to challenge the award before Mr Justice J Njagi and lost. Their appeal before Mr Justice GV Odunga also failed this February, hence Erad’s decision to move in with auctioneers.
In 2006, Erad argued in a letter that it had furnished a performance bond of $916,000 after which NCPB was supposed to provide it with letters of credit.
Because of NCPB’s failure to honour its part of the deal, Erad was unable to supply the maize.
But it suffered loss, the company’s lawyers argued, which included loss of profits at the rate of $49 a tonne and $1,838,000 as the cost of storing the maize.
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