Former Central Bank of Kenya governor Nahashon Nyagah and businessman Vimal Shah have been reinstated as directors of property developer Tatu City after the High Court ruled that their ouster was improper.
Justice Eric Ogola made the decision after he found that the election of a new chairman and appointment of directors was not on the agenda of the February 5 meeting in which they were ousted.
The duo filed the suit arguing that their removal was an alleged attempt by Tatu City’s foreign directors to plunder capital and income in the Sh240 billion project.
They also argued that the meeting was chaotic and that no resolution was passed.
“There was no such election on February 5. The defendants cannot rely on the purported unilateral decision by the other directors (Stephen Jennings, Frances Holliday and Hans Jochum Horn) as the basis of replacement of Mr Nyagah and Mr Shah.
“The action was in contravention of the articles of Tatu City and Kofinaf Company. Mr Nyagah and Mr Shah shall resume their positions in Tatu City and Kofinaf,” the judge ruled.
Mr Justice Ogola further said their reinstatement would last until the suit is determined, giving the two a first round victory in the suit that has threatened to unsettle the mega project.
The move, he held, is “for the sake of continued business and good order”.
Kofinaf owns almost all of the 2,400 acres on which Tatu City is to be built.
The project targets residents, companies and retailers who wish to live and work in “the modern, well-planned urban development in East Africa.”
Upon completion, it is expected to accommodate 70,000 residents and handle 30,000 visitors daily, according to its planners.
Its construction has however been hit hard by the legal battle pitting its Kenyan directors against their foreign counterparts.
The foreign directors had appointed Pius Ngugi to replace Mr Nyagah as Tatu City chairman and Mr Shah in a similar capacity at Kofinaf.
Mr Justice Ogola said the move was irregular as Mr Ngugi had been appointed chairman of the two boards on the same day he was named a director of the property developer.
“The defendants have not given any evidence that Mr Ngugi is a director of Tatu City and Kofinaf. Mr Ngugi was not one of the directors from whom a chairman could be elected. His appointment is therefore unlawful,” the judge added.
The judge will mention the matter on May 13 for further directions.