Economy

City billionaire sues top law firm in row over prime plot

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Billionaire businessman Peter Muthoka. PHOTO | FILE

Billionaire businessman Peter Muthoka has secured a court order freezing millions of shillings paid in a contested land deal that has sucked in Nairobi’s top law firms.
Acceler Global Logistics, a firm owned by Mr Muthoka, has won a court order to freeze Sh81 million of the Sh151 million it had paid Rahil International for prime four-acre plot on Mombasa Road.

Mr Muthoka has also sued top corporate law firm Coulson Harney for releasing the millions to Rahil International despite his firm, Acceler Global Logistics, calling for the land deal to be cancelled following questions over the real owners of the plot.

“The 1st defendant (Rahil International) deposit the sum of Sh81,100,000 into a joint interest-earning account in the name of Counsel for the plaintiff (Mohammed Muigai Advocates) and the 1st defendant herein within three days,” Justice Eric Ogola ordered.

The row started with the signing of a land purchase agreement between Acceler Global Logistics and Rahil International Limited, which claimed ownership of the  prime Mombasa Road land worth Sh168 million.

A deposit of Sh16.8 million or 10 per cent of the purchase price was paid with the agreement that the lawyers would pay the balance of Sh151.2 million upon registration of the title in the name of the buyer.

It was later found that the land appeared to have two registered titles both with differing signatures and the handwriting on entries also differing.

Acceler Logistics was unable to take move into the property measuring 1.6 hectares after it found another party was engaging in excavation, which prompted it to issue instructions to Coulson Harney not to complete the transaction.

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In a letter to Coulson Harney Advocates dated March 21 2016, Acceler demanded a refund of the balance of the purchase price or Sh151.2 million and a termination of the land deal given its unclear ownership.

Coulson Harney replied the next day that it was legally bound to release the money and said the “suspicion of fraud” had been settled by the Land registry.

The High Court on March 31 issued an injunction restraining Coulson Harney from releasing the funds pending the hearing and determination of the case.

Coulson Harney replied that the suit had been overtaken by events as the firm had already released the balance to the advocates of the sellers of the property.

By this time, Rahil had withdrawn half of the purchase price, which has now been frozen and put in a joint account pending the conclusion of the case.

“At the time the 1st defendant was instructed by their advocates not to deal with the funds, the account had a sum of Sh83, 116, 975,” Benjamin Tarus, a director with Rahil said in an affidavit. The other directors are David Ritho, Duncan Achar and Joseph Okoth.

The suit offers a peek into Kenya’s rickety manual land record that has been prone to manipulation.

Unsuspecting land buyers have been relying on searches of company details together with modified records at the Land ministry to acquire property and have lost hundreds of millions of shillings in fraudulent dealings.