House summons chief valuer over Corner House sale

Parliament has summoned two valuers to explain how a prime property in the Nairobi city centre was sold at less than its market value.

Corner House, which was owned by the collapsed Kenya National Assurance Company (KNAC), was sold for Sh620 million in 2000 despite having been valued at Sh770 million by the government three years earlier.

The Public Investment Committee wants chief government valuer Jim Gatheru and Irungu Mugo & Co Valuers — who valued the property at Sh550 million just before the sale — to explain the discrepancies.

PIC chairman Mithika Linturi said the disposal of the KNAC asset was “suspect” and that “it was worked out in favour of some individuals”.

The summons came after revelations by KNAC (2001) Company Ltd chief executive officer Alexander Kaminchia that the sale of several assets was done at a loss owing to contradictory valuation reports.

“We have been accused of selling KNAC assets at an understated price. It is surprising that the same person who did the valuation of all KNAC assets in 1997 returned a figure with a difference of Sh500 million in 2000,” said Kiminchia.

The committee also questioned special receiver manager in charge of the closed Life Fund during the 1997 and 2000 receivership James Olubayi.

Mr Olubayi could not explain how the property was valued lower than the price quoted in 1997 yet assessment was done by the same person.

Mr Kaminchia drew the attention of the committee to three different valuations of Corner House, located at the Junction of Kimanthi Avenue and Mama Ngina street.

“We need an explanation from Mr Olubayi on how the valuer put the price of Corner House at Sh770 million in 1997 but the handover report shows it fetched Sh830 million. Which is the right valuation?” Mr Kaminchia asked.

He said the valuer in the year 2000 quoted the same property at Sh550 million while the government valuer put it at Sh620 million.

Sammy Mwaita, the Baringo Central MP, said the building would have fetched more than Sh1 billion in 2000.

Mr Olubayi denied knowledge that KNAC prime properties in Nyali, Malindi, Kibarage, Nairobi’s Karen and Muthaiga estates belonged to the life fund.
“These properties were not in the list handed to me by then official receiver Omondi Mbago,” he said.

The Committee is also investigating how a company by the name Town and Country acquired a prime property land LR 1752 in Mombasa from KNAC, which belonged to the closed Life Fund without making payments in 1996.

The company later sold it to Mrs Zahra Moi, the wife of former Baringo Central MP Gideon Moi in 2010.