Ndegwa family sued over sale of ICEA tower to university

Billionaire businessman and Capital Markets Authority chairman James Ndegwa’s family has been sucked into a vicious dispute over the Sh1.85 billion sale to Jomo Kenyatta University of Agriculture and Technology (JKUAT) of the iconic ICEA building in central Nairobi.

Livingstone Real Estate, an agent, has moved to court against ICEA Lion Life Assurance Company, which is owned by the Ndegwa family, claiming it has been not been paid its dues after it found a buyer for the 21-floor tower.

The real estate dealer says ICEA Lion has refused to pay the agreed 2.5 per cent commission (Sh46.25 million) and instead that the deal was brokered by Knight Frank – another real estate firm in which the Ndegwa family has a significant stake.

Livingstone Gitonga, a partner at the real estate firm, says his agency was the one that drew JKUAT’s interest in the building after he personally received instructions to do so from Mr Ndegwa, the ICEA Lion chairman.

Mr Gitonga adds that his firm has sold several other buildings in Nairobi on behalf of the Ndegwa family, including AMBank House on Monrovia Street, Unga Gate in Westlands and a building owned by Mitchell Cotts in Baba Dogo.

“I have known one James Ndegwa for over 10 years as the chairman of ICEA Lion and also through a family holdings company called First Chartered Securities Limited. He has over time verbally instructed us to sell various properties and where we successfully solicited for and procured a buyer we have always been paid the commission payable,” Mr Gitonga says.

The real estate dealer says his company had written to JKUAT on September 11, 2012 and followed up with several meetings after they expressed interest in purchasing the property.

“Once we made a claim for our commission, ICEA Lion turned around and stated that it was Knight Frank that had found the buyer and that we were not involved at all in the above sale,” he adds.

READ: JKUAT to acquire ICEA building for Sh2 billion

James Ndegwa is the son of former Central Bank of Kenya governor Philip Ndegwa, whose family has vast interests in a number of sectors of the Kenyan economy.

Mr Ndegwa is also the chairman of NIC Bank where his family owns a 24.9 per cent stake (valued at over Sh7 billion). ICEA Lion is yet to respond to the suit.

Mr Gitonga’s partners, Duncan Mwangi Gichungi and Samuel Njagah Mungai, have also been listed as plaintiffs in the suit.

Livingstone Real Estate has listed JKUAT’s estates manager Hellen Karu as one of its witnesses. Ms Karu, the real estate agent, wrote a report on the building following a tour that covered every floor and lettable space at the ICEA building.

The ICEA building stands on 0.674 acres of land along Kenyatta Avenue and has a gross lettable area of 163,724 square feet and 113 car park bays.

ICEA Lion is ranked as the third largest life insurer in Kenya, behind Britam and Jubilee.

At full occupancy, ICEA building has the potential of generating Sh129 million in annual rent at current rates.

The list of its current tenants includes electronics giant Samsung, the National Bank of Kenya, Computer Pride Ltd, the Standard Media Group and Acacia Medical Centre Ltd.

The Ndegwa family also had interests in catering firm NAS, in which a French multinational, Servair, acquired a majority stake in 2011 in a deal worth more than Sh2.2 billion -- buying out the Ndegwas and other local shareholders.

Victus Ltd, a company associated with the family, owns 38.5 million shares or 50.93 per cent in Unga Limited and has vast interests in real estate sector.

The family also owns the prestigious Riverside Park in Lavington that is managed by Knight Frank.

Livingstone Real Estate has also asked the court to award it general damages for ICEA Lion’s refusal to pay the commission, alongside the costs it will incur in the duration of the legal battle.

The firm says Mr Ndegwa first instructed it to find a buyer for the ICEA building in 2009, but later opted to remove it from the market. It says Mr Ndegwa in 2012 again asked Livingstone to trace a buyer for the iconic building.

Mr Gitonga says in court documents that several other institutions his firm wrote to in 2012 had shown interest in purchasing the prime building.

The real estate agent is convinced that it was after his firm took JKUAT’s officials on a tour of the tower that the university decided to buy the ICEA building.

“We met KRA Pension Fund officials and representatives of the Jamia Mosque Development Committee together with the ICEA Lion CEO Julius Mutiga. The Laptrust Fund, which was at some point interested in purchasing the property, asked us for a formal confirmation from the owner of the property that we were duly authorised to sell the property,” he adds.

The documents filed before the Milimani Commercial Court indicate that Livingstone also approached the University of Nairobi and Moi University in a bid to woo them into purchasing the building.

In May last year, Mr Ndegwa said he would not resign as chairman of listed NIC Bank to avert conflict of interest as demanded by critics following his appointment to the Nairobi bourse top seat.

He instead opted not to participate on any deliberations on any company he has interests in.