Court Ends 28-Year Sh185.5m Battle Against CBK

The Court of Appeal of Kenya has dismissed a Sh185.5 million refund claim against the Central Bank of Kenya, ending a civil dispute that has lasted nearly three decades. The judgment, delivered on July 31, 2026, by Justices Joel Ngugi, Nduma Nderi and Katwa Kigen, spares taxpayers more than Sh3.5 billion, The Standard reported on August 6, 2026. Capital FM's Spencer Walela originally covered the story.

The case was filed in October 1998 by businessman Kamlesh Pattni, widely identified as the suspected mastermind behind Kenya's Goldenberg scandal, and Westmont Holdings Sdn. Bhd., a Malaysian company since wound up. The plaintiffs claimed the Sh185.5 million was a 10 percent stakeholder deposit toward the proposed purchase of the Grand Regency Hotel by Lynwood Development Ltd.

Contents

01

The Grand Regency Hotel and the Goldenberg Scandal

02

What the Court Found

03

Key Testimony

04

A Three-Decade Legal Journey

05

What the Ruling Means

The Grand Regency Hotel and the Goldenberg Scandal

The dispute stems from the Grand Regency Hotel, an asset linked to the Goldenberg scandal. In 2008, Pattni surrendered the hotel to the CBK to settle approximately Sh2.5 billion owed through Exchange Bank. The regulator later sold it to Libyan investors for about Sh2.9 billion, triggering public controversy and the Cockar Commission of Inquiry.

What the Court Found

The appellate court ruled that the Sh185.5 million, paid by Pattni in May 1997, was not a refundable stakeholder deposit. The funds formed part of a wider Sh2.1 billion agreement to redeem the charge over the hotel. The court held the deposit was lawfully appropriated by the CBK in discharge of Exchange Bank Ltd's liabilities.

The court identified procedural flaws: Westmont Holdings, having been wound up, lacked legal capacity to continue the suit, and Lynwood Development Ltd had been improperly introduced without leave. The CBK's counterclaim was dismissed for lack of proof.

Key Testimony

Jasmine See, attorney for Westmont Holdings and Lynwood Development Ltd, acknowledged under cross-examination that Westmont had been liquidated in May 2002 but continued acting under a power of attorney.

Former CBK director Kennedy Abuga testified the money was never held in trust and was received under agreements with Pattni to redeem the charge over the hotel. CBK finance official John Githongo produced ledger records showing the funds were used to reduce Exchange Bank's liabilities.

A Three-Decade Legal Journey

The case passed through several appellate stages. In 2021, the Supreme Court certified the matter as one of general public importance after overturning an earlier Court of Appeal decision, paving the way for this final appeal. The judgment marks one of the last legal threads from the Goldenberg era.

What the Ruling Means

The dismissal relieves the CBK, and Kenyan taxpayers, of a potential liability exceeding Sh3.5 billion. For Pattni and the defunct Westmont Holdings, the ruling closes a legal avenue open since October 1998. With no further appeal, the judgment ends one of Kenya's longest-running civil disputes tied to the Goldenberg affair.