City home owners who bought plots on a 5.6 hectare land bordering Imara Daima estate on Mombasa Road risk losing their investment as it emerges that the land belongs to a collapsed insurer.
The chairman of the Parliamentary Select Committee on Public Investments Mithika Linturi on Thursday said plot No.209/11241 known as Muimara Estate, was irregularly acquired from the receiver managers of the collapsed Kenya National Assurance Corporation (KNAC).
The managers allegedly sold the land to Muimara Property Ltd in 2005 at almost half the market price before subdividing and selling the plots to individuals. The 176 owners have since developed them and have been living there for years.
The House team was on Thursday told that the land, which had been valued at Sh70 million in 2002 was sold at Sh38 million in 2005.
“The audit records indicate that the transaction was a conspiracy between officials at the ministry of Lands, the lawyers representing Muimara Property firm and the receiver managers,” said Mr Linturi.
Proceeds from the receivership were supposed to go to civil servants who were insured by KNAC that became the Moi era monument of mismanagement.
The committee learnt that there were no documents to prove that tax was paid on the land deal.
The plot which was originally owned by Mua Park Investments Ltd had in November 1989 been charged to Middle Africa Finance Company against a loan of Sh10 million.
The charge was later transferred to KNAC in 1992. After the collapse of the insurer, the official receiver manager sold the property and settled for a bid of Sh38 million from a property firm, Muimara Property Ltd.
“It was not, however, explained why a property which the government valuer had put at Sh70 million in 2002 was sold for Sh38 million in 2005,” said a special audit report of the Controller and Auditor- General.
The management of Muimara Property Ltd could not be reached on phone yesterday despite several attempts to get their comments.
Further records showed that Sh16.5 million was deducted from the Sh38 million as City Council rate arrears, leaving Sh21.4 million as actual receipts from the land.
But there are no documents to support the purported payment. There are also no papers to show how the receiver manager receipted the proceeds from the sale of the land or how the Sh21.4 million was spent.
Kenyans have in recent past been victims of irregular land transfers largely due to corruption at the Lands ministry where multiple title-deeds are issued for one piece of land.
It also emerged that property lawyers and valuers have been reducing the quotations of land prices on documents in order to reduce stamp levied on land transactions, denying the government millions of shillings in tax revenue.
The chief registrar of lands, Mr Cyrus Ngatia, however, said the manual system of documentation at the ministry had led to the loss of documents and that it was difficult to trace some of the supporting papers in the property transfer.
The Members of Parliament want to find out how property belonging to the Kenya National Assurance Company were disposed of and whether full payment was made and accounted for.
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