Home Business South Sudan gets accounts access in Sh5bn Jirongo row

South Sudan gets accounts access in Sh5bn Jirongo row


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South Sudan gets accounts access in Sh5bn Jirongo row


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Former Lugari Mp Cyrus Jirongo. FILE PHOTO | NMG

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Summary

  • High Court has allowed the South Sudan government to operate the two accounts on condition that it leaves Sh5.4 billion untouched.
  • South Sudan had protested an earlier decision to freeze the accounts, terming it a declaration of war by Kenya, as it is now unable to deliver any services to its largely poor population.
  • Justice Joseph Sergon barred the Salva Kiir-led government from removing Sh5.4 billion from the two accounts, as Yusung Construction pursues an appeal against an order lifting the complete freeze on the two accounts.

A Kenyan court has given the South Sudan government partial access to its banks accounts at NCBA and Stanbic bank in the wake of a legal row with a firm linked to former Cabinet minister Cyrus Jirongo, which is demanding Sh5.4 billion from Juba.

High Court has allowed the South Sudan government to operate the two accounts on condition that it leaves Sh5.4 billion untouched.

South Sudan had protested an earlier decision to freeze the accounts, terming it a declaration of war by Kenya, as it is now unable to deliver any services to its largely poor population.

Justice Joseph Sergon barred the Salva Kiir-led government from removing Sh5.4 billion from the two accounts, as Yusung Construction pursues an appeal against an order lifting the complete freeze on the two accounts.

Yusung Construction, which is associated with Mr Jirongo, bagged a deal to put up the John Garang Military Academy and the Natinga Warehouses in 2008.

It fell out with South Sudan, prompting a contested out-of-court deal that granted the Jirongo-associated firm a Sh5.4 billion payout for contract breach.

The order freezing the accounts was granted in December and was extended from time to time by different judges until last month when Justice Said Chitembwe lifted it following a plea by South Sudan.

While lifting the order on February 26, Justice Chitembwe heard that the government could not meet some of its obligations including paying salaries.

The judge said South Sudan could operate the bank accounts at NCBA and Stanbic Bank freely, prompting an appeal from Yusung Construction that led to Juba being granted partial access to the accounts.

Juba agreed to pay Yusung Construction a $24 million (Sh2.6 billion) advance to ensure that work gets underway. The company then laid the complex’s foundation.

No more work was done, and everything went silent until two years ago when Yusung Construction approached the East African Court of Justice demanding payment of $49.3 million (Sh5.4 billion) as sums due with interest.

The construction firm claimed that it was forced to move construction to different sites four times following protests and the selection of areas prone to flooding.

Yusung Construction claimed that it exhausted the downpayment while moving construction sites and that the South Sudan government turned hostile in 2011 and kicked it out.

Nothing happened with the suit filed by the Jirongo-associated firm until November 26, 2020, when an out-of-court deal was signed to have Yusung Construction paid the demanded balance.

Biong Pieng Kuol Arop, an official of South Sudan’s Finance and Planning ministry, committed to having Yusung Construction paid the claimed Sh5.4 billion. South Sudan was to pay an initial $10.9 million (Sh1.1 billion) and then remit three equal instalments of $12.8 million (Sh1.4 billion).

Under the deal, any default was to give Yusung Construction permission to attach South Sudan’s assets to recover the sums.

And it is that deal that has now seen South Sudan’s bank accounts held by Kenyan lenders frozen, as the Juba administration now claims that Mr Arop did not have the authority to negotiate or strike such deals on its behalf.

South Sudan now says Yusung Construction obtained the out-of-court settlement through fraud and then used it to trick the Milimani High Court into freezing the accounts.



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