Economy

Jirongo’s 1,000 acre Ruai land set for auction

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A controversial 1,000-acre piece of land owned by businessman Cyrus Jirongo in Nairobi’s Ruai area is set for auction next Wednesday. FILE PHOTO | NATION MEDIA GROUP

A controversial 1,000-acre piece of land owned by businessman Cyrus Jirongo in Nairobi’s Ruai area is set for auction next Wednesday.

The sale of the prime property, estimated at Sh1 billion, is said to have been prompted by failure to service a multi-million shilling loan borrowed from collapsed Postbank Credit Limited by a firm associated with Mr Jirongo.

Postbank Credit went under after the 1992 General Election. A source at Keysian Auctioneers Thursday said proceeds from the sale will go to the Central Bank of Kenya, which is preparing to wind up seven collapsed financial institutions within the next one year. 

The liquidation process involves paying depositors a guaranteed sum of up to the Sh100,000 insured deposits, while those with balances in excess of the sum are entitled to receive liquidation dividends based on the value of recoveries and proceeds from the sale of the institution’s assets.

“We shall sell by public auction… all that property in the name Offshore Trading Company Limited/Sololo Outlet,” said Keysian Auctioneers in a notice.

The National Social Security Fund (NSSF) entered into an agreement with Sololo Outlets, a company associated with Mr Jirongo, in 1992 to buy an incomplete housing project in Nairobi’s South B Hazina estate.

The collapsed Postbank Credit financed the deal which consisted of 420 homes, a school and a shopping centre, worth Sh1.2 billion.

The seller raised the price to Sh2.65 billion in May 1993 citing a jump in material costs, prompting NSSF to terminate the contract after Sh900 million had been paid.

NSSF hired a different contractor to finish the work and the homes have since been sold out individuals under a tenant purchase scheme.

READ: NSSF ignores Jirongo, issues titles for houses

Mr Jirongo in 2012 moved to court seeking to repossess Hazina Estate from NSSF.

The Ruai property has been at the centre of a legal dispute after the politician allegedly failed to compensate a businessman for terminating a deal to sell him land in Nairobi’s Imara Daima Estate.

READ: Jirongo locked in another land row

Mr Jirongo declined to pay Emris Investment Ltd Sh32 million in a Sh50 million compensation deal, which was arrived at after the politician sold the property to a third party.