Economy

Ex-CBK governor Nyagah faces Tatu City fraud charge

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Former Central Bank governor Nahashon Nyagah. PHOTO | FILE

The Directorate of Criminal Investigations (CID) has called for the arrest and prosecution of former Central Bank of Kenya governor Nahashon Nyagah over an alleged grand scheme to defraud real estate developer Tatu City of more than Sh5 billion.

Detectives investigating transactions involving the project’s subsidiaries have concluded that Mr Nyagah used close relatives and associates to irregularly transfer shares worth Sh5.3 billion, and has recommended that he and five others be charged in court.

The report compiled by a Mr Joseph Ngisa states that Mr Nyagah nominated relatives and members of Covenant Church as shareholders in Purple Saturn, a land holding subsidiary of Tatu City, and used them to fraudulently transfer the shares.

The report says that billionaire businessman Vimal Shah has been evading interrogation and is yet to record a statement, but has not recommended his prosecution.

The investigations followed a complaint lodged by Stephen Jennings who is the CEO of Tatu City’s lead investor Rendeavour.

“Going by the evidence already collected we find Nahashon Ngige Nyagah, Chairman of the Board of Directors of Kofinaf and Tatu City, to be criminally responsible for conspiracy to defraud contrary to section 317 of the penal code alongside Jeremy Njeru Nyagah, Judy Wanjiku Ngugi, Jane Gacoka, Rachel Murugi Mugo and Eunice Waithira Mwangi,” the report states.

Investigators say that the alleged illegal share transfers from Purple Saturn to another firm called Nara occurred between February and August this year.

Nara is allegedly owned by Mr Nyagah’s sister. The report says that there are no financial transactions to prove that the share transfer was valid.

Mr Nyagah’s lawyer Nelson Havi has been accused of aiding the former CBK governor’s scheme by threatening witnesses and sleuths during investigations, and of being behind the formation of Nara which received the Sh5.3 billion shares.

“Norman Nyagah, former MP Kamukunji, has been interfering with investigations not wanting anybody from the side of Nahashon Nyagah to be interviewed. He has threatened investigators via the phone of advocate Nelson Havi.

“The advocate Havi has been coaching the nominees of Nyagah in the companies on what to write,” the report states.

He is also accused of hoodwinking Tatu City’s former lawyers to release titles for the Sh240 billion project’s land to his firm, at which point police say the alleged embezzlement scheme was discovered. 

READ: New twist as Nyagah is named in Sh9 billion Tatu City land scandal

Mr Havi has, however, obtained a court order stopping his arrest or that of Michael Osundwa Sakwa, another lawyer implicated in the report.
Justice George Odunga issued the order last Wednesday. Also wanted for questioning is former Tatu City CEO Lucas Omariba who police say has gone into hiding.

The final report will be sent to the Director of Public Prosecutions for action.

The Tatu City project was originally conceived by Russian-based investment bank Renaissance Capital, but stalled even before take-off due to incessant shareholder wrangles.

Mr Nyagah now claims the foreign directors want exclusive control of the project as part of a plan to plunder the project’s funds and assets.

The local and foreign investors have since February been involved in a series of legal battles, with each side accusing the other of mismanagement and fraud.

Justice Francis Gikonyo in May issued an order stopping Mr Nyagah from interfering with any land in the project after the foreign directors accused him of embezzling land worth over Sh9 billion. The matter is still pending in court.

The foreign investors added in the suit that they have been engaged in legal battles with Mr Nyagah in Mauritius over the project, but that the former central bank boss lost and his shares in some of the offshore firms were diluted.

The two local managers also want Mr Jennings and his partners stopped from selling any more of Kofinaf’s properties to settle a $62.5 million (Sh5.6 billion) loan until they submit an audit by PricewaterhouseCoopers on the borrowed sum and its current status in court.

Mr Nyagah and Mr Shah want the foreign directors compelled to account to them the details of $75.3 million (Sh6.7 billion), as it is Sh1.1 billion more than the amount expected to settle the loan.

The foreign partners through their company Renaissance Partners Investment Limited borrowed the amount to secure 100 per cent ownership of Kofinaf Limited.