The Director of Public Prosecutions, Renson Ingonga, has moved to terminate the criminal proceedings against businessman Jayesh Kumar Prabhudas Kotecha.

In an application filed before the magistrate’s court, the DPP cited an incomplete investigation as the reason for seeking to withdraw the charges.

Prosecutors explained that two pending civil suits are closely tied to the criminal case, and the outcome of those matters would influence whether the case before Milimani Magistrate Caroline Nyaguthii should continue.

Kotecha and Midland Hauliers are currently facing allegations of conspiracy to defraud in the matter pending before the lower court.

The State claimed that on April 29, 2019, Jayesh Kumar Prabhudas Kotecha and Midland Hauliers unlawfully transferred a fleet of vehicles to Super Hakika from the company's premises on Kyangombe Road, Nairobi County, without the approval of court-appointed administrator Ponangipalli Venkata Ramana Rao.

Prosecutors argued that the move was aimed at defrauding Prime Bank of Sh706 million. The bank had placed Midland under administration due to a dispute over an outstanding loan.

Kotecha was further accused of assuming management duties of the firm during the administration period without consent from the appointed administrator.

The commercial court is currently handling two separate cases stemming from a dispute between Prime Bank and Midland-related companies.

One case challenges the legality of placing Midland Hauliers under administration, while the other revolves around the sale of prime properties in Kyangombe and Kisumu assets that were allegedly used to secure the disputed loan.

In the land matter, Midland Investments (Kisumu) Ltd has taken Prime Bank, Midland Hauliers Ltd, and Midland Emporium Ltd to court, disputing the bank’s claim that it extended a $1.5 million (approximately Sh195 million) and a Sh40 million loan to Midland Emporium in 2009.

The firm argues that despite interest having allegedly accrued on the loan, the funds were never actually disbursed to the company.

Midland Investments asserted that Prime Bank had wrongfully transferred liability onto Midland Hauliers.

The company also accused the lender of failing to provide a clear account of specific fixed deposits and the interest accrued on them.

Additionally, it alleged that the bank applied unauthorized interest rates to the Emporium account and imposed penalties that were never part of any agreed terms.

Midland Investments argued that the bank’s failure to provide a clear and accurate breakdown of transactions made it difficult to determine the actual debt owed by Midland Hauliers.

The firm also accused the lender of failing to properly account to other guarantors for the funds credited to Midland Hauliers’ account.

The court was told that when Midland Hauliers assumed the loan facilities from Midland Emporium, the bank held securities valued at Sh195 million.

However, Prime Bank dismissed the claims, asserting that the case amounted to an abuse of the judicial process, given that a separate insolvency matter involving the same parties was already pending before the court.

Prime Bank maintained that Midland Investment, Midland Hauliers, and Midland Emporium shared a common director, Jayesh Kotecha, who had signed most of the correspondence with the bank since the inception of their dealings.

The lender argued that the suit was intended to obstruct the work of Ramana Rao, the court-appointed administrator, and pointed out that the three firms were essentially sister companies.

It further criticized the decision by the same directors despite heading different entities to authorize legal action between their own affiliated companies, calling it improper.

The bank insisted that all the directors were fully aware of the loans in question, noting that Kotecha had even committed to injecting Sh80 million from his fixed deposit account toward settling part of the debt.

As of June 30, 2019, Prime Bank claimed, Midland Hauliers owed $6.6 million (approximately Sh850 million) and an additional Sh6.8 million.

Justice David Majanja ruled on March 26, 2021, to dismiss the case and revoked all interim orders that had previously favored Midland Investment.

Meanwhile, before the magistrate’s court, the Director of Public Prosecutions (DPP) stood by his authority to terminate the criminal case at any point, citing a review of the investigation file.

However, the complainant’s lawyer, Elijah Mwangi, challenged the DPP’s move, insisting the criminal proceedings were separate from the civil dispute.

“We had already completed pre-trial preparations and were ready with witnesses. Now the prosecution wants to walk away from the case without adequate explanation,” Mwangi argued.

The matter is set for mention on July 15, 2025.