Former Central Bank of Kenya governor Nahashon Nyagah and businessman Vimal Shah have asked the High Court to stop a board meeting whose agenda, they claim, is a second attempt to kick them out of the multibillion shilling Tatu City real estate project.
Mr Nyagah has, in a court application, accused the foreign shareholders and Tatu City board members of organising a meeting to oust him from the board, barely a month after the High Court reinstated him as chairman.
He wants the court to stop New Zealand national Stephen Jennings, Briton Frances Holliday and Norwegian Hans Jochum Horn from holding the meeting whose agenda includes election of a new chairman to Tatu City and Kofinaf —a company that owns most of the 996-acre land earmarked for the project.
“The defendants have convened a meeting on March 24 with the intention among others to remove Mr Nyagah as chairman and as one of the persons designated to liaise with PriceWaterhouseCoopers already resolved to be undertaken with his participation,” said Nelson Havi, Mr Nyagah’s lawyer.
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.
Justice Eric Ogola earlier this month reinstated Mr Nyagah as chairman following his ouster in an earlier board meeting.
He now claims the foreign directors want exclusive control over the project as part of a plan to plunder the project’s funds and assets.
Mr Jennings, Mr Holliday and Mr Horn have denied the allegations, and have shifted blame on the delayed loan repayments on the local partners.
Mr Nyagah’s chairmanship, they say, is protected by Justice Ogola’s ruling, which also reinstated businessman Mr Shah to the board.
“The defendants have no intention of removing Mr Nyagah as chairman of the companies which has in any event been protected by the order made on March 6. With respect to the articles of association of the companies, the intention is to strengthen the governance structures,” Mr Jennings said.
The two local managers also want Mr Jennings, Mr Holliday and Mr Horn 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 colossal sum to secure 100 per cent ownership of Kofinaf Limited.
“The defendants ought to give an account to Tatu City and Kofinaf for the sum of Sh6.7 billion in respect of the properties sold. They are foreigners with no known assets within the jurisdiction hence the need for security in respect of Sh1.1 billion, the sum for which the loan is overpaid,” Mr Nyagah added.
Mr Jennings holds that the foreign partners are committed to completing the audit as soon as possible and said Mr Nyagah and Mr Shah are to blame for the delay because of continuous filing of court applications.
“The defendants’ only interest is to ensure the audit is undertaken in a clear and transparent manner. The only parties delaying the engagement (of PwC) has been Mr Nyagah and Mr Shah who insist on making unwarranted applications to court,” Mr Jennings said.
The myriad court cases, Mr Jennings adds, has dented the project’s reputation and may discourage investors from participating in it.