Kenya Duty Free dispute takes dramatic twist

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The long-running dispute over the ownership of Kenya Duty Free (KDF) took another turn at the end of December 2003 when documents relating to the alleged sale of the operator were found during a farmhouse blaze

The long-running dispute over the ownership of Kenya Duty Free (KDF) took another turn at the end of December 2003 when documents relating to the alleged sale of the operator were found during a farmhouse blaze.

The dispute centres on the alleged sale of KDF by owner Nassir Ibrahim Ali to Nairobi businessman Kamlesh Pattni in 1992 for $13.75m. Ibrahim Ali denied all knowledge of the sale and when Pattni produced documentation relating to the transaction, the Kenyan High Court granted an injunction prohibiting Ibrahim Ali from disposing of any part of the company. Ibrahim Ali claimed the documents are forged.

The burned documents were found last month in a farmhouse owned by Pattni. Detectives were unable to save two tonnes of documents from the fire but did leave the site with ?truckloads of intact documents,? local reports suggested.  They included ledger and purchase cards, invoices, sales receipts and bonded warehouse inventories for goods already removed.

Since the dispute began, KDF has been handed over to government-appointed receivers but has been in the possession of the Kenyan Anti-Graft Body since November, amid claims that the operator may have been purchased fraudulently by Pattni's company Goldenberg International.

It is claimed that Goldenberg purchased the duty-free shops with Kenyan government money, through a bonus system created by the government to encourage exports.

The Goldenberg enquiry is being held in Kenya and will determine if there was a sale and if so, what part government money plays in the transaction. Kenya Anti-Corruption Commission spokesman Kaplich Barsito said: ?At the end of the inquiry, if it is determined that the properties were acquired inappropriately using government money, then they will be returned to the state.?

The case is expected to continue throughout the year. Until the decision is made, KDF?which runs concessions at Nairobi, Jomo Kenyatta and Mombassa airports?is being run under the control of the Anti-Graft Body.