Kerongwe & Sons CEO John Kerongwe Mwita sued for Ksh 63 million fraud in Dubai gold scandal

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A Dubai-based company, SH Trading DMCC, has filed a lawsuit against Kerongwe & Sons General Traders Ltd, a Kenyan gold-trading firm, and its Chief Executive Officer, John Kerongwe Mwita.

The lawsuit seeks a refund of over Ksh 63 million (approximately $489,950) paid for 700 kilograms of gold that were never delivered as agreed.

SH Trading DMCC specializes in purchasing and importing gold for use in the medical sector.

The company expanded its operations to Kenya, where its representatives met with key industry players, including Kerongwe & Sons.

These introductions were facilitated by contacts within Kenya’s Ministry of Mining, which gave SH Trading confidence in their dealings.

During their interactions, officials from SH Trading were shown approximately 720 kilograms of gold.

To verify authenticity, a sample weighing 63.5819 grams was tested, purportedly at the Ministry of Mining, and confirmed to be genuine.

An evaluation certificate dated May 24, 2024, was provided, leading to the signing of a contract for the supply of the gold.

The gold bars were physically inspected at Kerongwe & Sons’ office in Spring Valley, Nairobi.

Following these assurances, SH Trading proceeded to make payments totaling $489,950 through various channels, including cash, wallet transfers, and bank transactions.

The agreement stipulated that 700 kilograms of gold would be delivered to Dubai by June 5, 2024.

However, the delivery did not occur, and despite repeated demands, the gold was never shipped.

The breach of contract has reportedly caused significant disruptions to SH Trading’s supply chain, resulting in substantial business losses.

The company estimates that the failure to receive the 700 kilograms of gold, valued at approximately $28 million, has created serious gaps in their manufacturing lines, affecting their operations and delivery schedules.

In response, SH Trading DMCC has taken legal action, seeking a full refund of the $489,950 paid, along with interest and damages for the breach of contract and loss of business.

The lawsuit names both Kerongwe & Sons General Traders Ltd and its CEO, John Kerongwe Mwita, as defendants.

The company plans to present evidence, including photographs and videos, demonstrating the existence of the gold bars at the Nairobi office, to support their claims in court.

Kerongwe & Sons General Traders Ltd is a licensed dealership specializing in mineral trading, particularly in the gold business.

The company claims to have mining interests in Migori and a warehouse in Nairobi with substantial quantities of gold.

Despite these assertions, the current lawsuit raises serious questions about the firm’s business practices and reliability as a trading partner.

This case highlights the risks and challenges associated with international gold trading, emphasizing the importance of due diligence and verification in such high-value transactions.

The outcome of this lawsuit may have big implications for both companies involved and could influence future dealings in the gold trade between Kenya and international partners.

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