Suraya shareholder row deepens with secondary school demolition

A school sitting on the land where the Sh30 billion Fourways Junction estate is being developed was demolished yesterday, sparking off another row between the developers and a former director Nancy Wanja Gatabaki.

The demolition came just three months after Muga Developers reached a Sh725 million settlement with Mrs Gatabaki, who said she owned the structures that were partly demolished yesterday without any notice.

“I do not own the land the school —Balkan Secondary School—sits on, but I own the permanent structures which they had no right to demolish, worse still without giving me any form of notice,” Mrs Gatabaki said.

Suraya Properties said it bought the land occupied by the school from Mr Ramesh Dhingra for Sh60 million in 2009 as it sought to fast track the development.

“This deal was on the promise that he would vacate the premises by February last year,” said Mr Peter Muraya, who together with his wife Sue Muraya own Suraya Properties—the company that originally partnered with the Gatabakis in the real estate project.

Suraya Properties is the anchor shareholder in Muga Developers, the promoters of Fourways Junction. Balkan Secondary School had 280 students before it was closed in May this year to pave way for the gated community estate.

Mrs Gatabaki claimed an agreement she signed seven years ago required Mr Dhingra to relinquish ownership of the school to her on expiry of the 12 year lease.

Contract agreements exclusively seen by the Business Daily reveal that Mr Dhingra was supposed to pay the Gatabakis Sh8 million in 2008 for him to construct and run a school at their land.

Part of the Sh60 million, Mr Muraya said, went towards settling balances that Mr Dhingra owed the Gatabakis.

After the ruling that awarded her Sh725 million in September, Mrs Gatabaki had requested the Surayas—through her husband—Dr Samuel Gatabaki—who is still a director of Muga Developers—to allocate the 3.6 acres of land given to her by the court around the school so that she can run it.

Under the settlement, Mrs Gatabaki will also be allocated ownership of residential apartments worth Sh323 million once phase two of the multi-billion project is completed.

Mr Muraya said Mrs Gatabaki cannot dictate where the 3.6 acres should be hived off from so long as it is within the project site.

“We have a right to do what we want to do with our land without prior notice. Any argument to the contrary cannot hold in any court of law”, Mr Muraya said.

He added that Mrs Gatabaki would get her 3.6 acres from a parcel of 54 acres that is being demarcated.

Mrs Gatabakis lawyers said they would pursue in court compensation for the demolished building.

Ms Sheila Mugo, one of Mrs Gatabaki’s lawyers, said Balkan School was recently valued at Sh15 million.

The award Mrs Gatabaki walked away with in September for the 25 per cent stake she had in Muga Developers, earned her an estimated Sh15 million for every acre of land she jointly contributed to the Fourways Junction project with her husband.

So far, she has received Sh140 million with the balance of Sh262 million expected to be paid in February next year.

The suit was sparked off by Mrs Gatabaki claiming that the Murayas illegally increased their stake in Muga Developers to 67 per cent, leaving the remaining 33 per cent stake to be shared between her and her husband.

Move to court

She further alleged that she was kept in the dark when changes, including the entry of a fifth shareholder, Frangie Investments, with a 12 per cent stake interest, took place.

The project, Fourways Junction, is located between the leafy Runda Estate in Nairobi and the Windsor Golf and Country Club, at the junction of the northern by-pass and Kiambu Road.

Upon completion, it is expected to hold a mix of cluster apartments, office blocks, a shopping mall, a three-star hotel and a country club.

Suraya Property Group is also embroiled in a multi-billion property tussle involving a member of the Kenyatta family and a listed investment company.

Mr Muraya moved to court in October to block the sale of 242 acres of land by Michael Muigai Kenyatta to British American Investment Company (K) for Sh700 million.