More trouble is piling for CMC di Ravenna, the Italian firm at the centre of a Sh21 billion dams scandal, after a high court froze its assets in Kenya.
Justice Francis Tuiyott stopped CMC di Ravenna from selling, transferring or interfering with equipment and 98 motor vehicles that were bought through loans advanced by Barclays Bank of Kenya.
The move has not only crippled the operations of the firm, but also added to the financial problems that saw it abandon the multibillion-shilling Itare Dam in Nakuru County and fail to commence construction of the Sh61 billion Arror and Kimwarer dams in Elgeyo-Marakwet County.
The seized vehicles and equipment were intended for use in the scandal-hit dams, which have become the focus of criminal investigations by detectives.
Barclays initially wanted all the motor vehicles and equipment surrendered to a yard in Industrial Area owned by Leakey's Auctioneers, which the lender hired to help pursue its €5.1 million (Sh585 million) debt.
But the Daily Nation has established that last Friday the two parties mutually agreed that CMC di Ravenna surrenders all the 98 vehicles and assorted equipment to Casuarina Limited in Nakuru latest on Wednesday. Justice Tuiyott recorded the agreement as a court order.
The assets will remain at the agreed space to help preserve them, as the hearing of the judge presides over the dispute. The case will be mentioned on Monday to confirm compliance.
"This honourable court does issue and order CMC di Ravenna to forthwith deliver all the motor vehicles and equipment listed and described in the schedule to Casuarina Limited, opposite Midland Hotel, Nakuru, for purposes of preservation of the said motor vehicles and equipment pending the hearing and determination of this application," Justice Tuiyott ordered.
Barclays says it fears that CMC di Ravenna may either move the assets outside Kenya or sell them to settle other debts before honouring its loan obligations.
Detectives have been pursuing officials of the company and some Kenyan bureaucrats after it emerged that CMC di Ravenna and an Italian insurance company received over Sh21 billion as part-payment for the construction of the two dams.
Directorate of Criminal Investigations (DCI) detectives are also probing allegations that Kenyan officials were bribed to ensure that money was released to CMC di Ravenna for the dam projects.
Treasury Cabinet Secretary Henry Rotich was grilled for three days at the DCI headquarters earlier this month over the Sh21 billion payments.
The probe has also sparked a war of words between DCI boss George Kinoti and Deputy President William Ruto.
Records show that the equipment and vehicles were due for repossession on December 20 last year, just two weeks after CMC di Ravenna filed for bankruptcy in Italy.
Italian courts have ordered the company and its creditors to come up with a debt settling arrangement, but Barclays argued that the financing arrangement bars the firm from entering into any schemes of arrangement with creditors.
The lender adds that CMC di Ravenna defaulted and was in arrears of €394,520 (Sh45.1 million) as at December 13, 2018 despite being offered extension for repayment.
The agreement, attached as evidence in court, allowed Barclays to repossess the motor vehicles and assets in the event that CMC di Ravenna became insolvent.
"Barclays' securities, being motor vehicles and equipment, are depreciating in value, and unless the orders sought are granted, Barclays stands to suffer irreparable loss and damage that cannot be compensated by an award of damages, which in any event CMC di Ravenna cannot pay," the bank's lawyer, Mr Kamau Karori, argued.
CMC di Ravenna has been going through similar problems in Nepal, where a contract to build a drinking water dam was abandoned.
Eventually, they lost the contract after the Asian Development Bank said it would not support the project if the government reappointed CMC di Ravenna to complete the unfinished works.
In Kenya, detectives are questioning officials on why they awarded the Italian firm the tenders without doing due diligence.
The move by the court puts the operations of the cash-strapped Italian firm -- and its projects, which have aroused political temperatures in the country -- in limbo.