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Rahab Mwihaki: Low-profile hotel billionaire cutting big deals
From left to right: Lake Naivasha Resort Directors, Winnie Wambui, Rahab Mwihaki, Mercy Muthoni (in red) and Terry Mucheru (black stripes) cut a cake shaped like an auditorium to commemorate the opening of the Lake Naivasha Resort's state-of-the-art auditorium.
After William Ruto was declared the winner of the August 9, 2022 presidential election, he herded his newly acquired troops to Lake Naivasha Resort, a Sh1 billion, 96-room hotel styled as a conference and holiday destination.
The two-day retreat, during which the new President sought to chart his legislative agenda, was a boon to Rahab Mwihaki Karoki, the proprietor of the luxurious hotel, where guests are occasionally treated to the spectacle of hippos nonchalantly emerging from the depths of the lake on the scent of food.
Two years later, Lake Naivasha Resort has emerged as the Mecca of conferences for State corporations, agencies and counties.
In February this year, Dr Ruto returned to the hotel with his cabinet secretaries and their respective principal secretaries for the Second National Executive Retreat, one of the 257 public contracts valued at Sh209.1 million that the hotel has inked since 2018, when the disclosures were published on the Public Procurement Information Portal.
President William Ruto accompanied by his deputy Rigathi Gachagua at Lake Naivasha Resort on February 21, 2024.
Photo credit: Boniface Mwangi| Nation Media Group
This is the highest number of hospitality contracts won by a single supplier (Dr Ruto’s Weston Hotel has bagged the most contracts in Nairobi alone).
The list is not exhaustive as some contracts have not been published on the portal.
A big chunk of the deals won by Lake Naivasha Resort—161 contracts valued at Sh135.6 million—came in the last two years, compared to 96 contracts worth Sh73.5 million that the resort won in the four years to 2022.
Ms Mwihaki—who owns the luxurious hotel with her five children, a son and four daughters—is one of those low-profile money-minters who can only be described with such generic superlatives as “city tycoon” because very little is known about them.
Other Naivasha-based hotels the family owns are Sweet Lake Resort and the Masada Hotel, which have won eight and 23 contracts respectively.
She is not listed as a shareholder or director of Sweet Lake Resort, but her children are. In Nairobi, the family owns the Pearl Palace and Hadassa.
The family is also into real estate. Through Family First Signature, they own Amber House and Formation House, both located on Mfangano Street.
They also own the building formerly known as Quran House, Brighton House, and Lenana Forest View Apartments.
Skilled at playing her cards close to her chest, she has cut mega deals with little fanfare. On the few occasions when her cover has been blown, it has usually been because of her inevitable dalliance with scandal-courting politicians.
There is no indication that she is aligned with any political camp—she also made good money during Uhuru Kenyatta’s reign. But she is certainly deft at making money from the political class.
Ms Mwihaki, who has several hotels and properties to her name, told the court that she is the one who sold Nairobi’s Delta Hotel to former Kiambu governor Ferdinand Waititu, pocketing Sh380 million. She revealed this while testifying in a graft case against the politician.
Deputy President Rigathi Gachagua at the Kenya Urban Forum at Lake Naivasha Resort, Nakuru County on June 16, 2023.
Photo credit: DPPS
Of the 23 contracts on by Masada Hotel, one stands out like a sore thumb. The hotel, which provides hospitality services, was awarded a tender by the Uasin Gishu County government to construct the second phase of the Model Sub County Hospital at a cost of Sh450,565,250.
Although the construction was behind schedule, the Auditor-General gave it a clean bill of health because it had been competitively procured and work had started on site.
However, her acquisition of Family First Signature, and the tax case that has dogged the firm have raised more questions than answers.
On April 30, 2012, Pratik Mansukhlal and Anil Kumar Malde, resigned as directors of Family First Signature and transferred all their shares, including the existing liabilities, to Ms Mwihaki.
The Kenya Revenue Authority (KRA) would later bar the two Indian traders from leaving the country over a Sh368.8 million tax demand from Family First Signature amid claims that the transfer of shares had not been properly executed.
In February last year, some 12 years later, the KRA noted that the Maldes never produced a copy of the board’s resolution showing the alleged transfer of shares to Ms Mwihaki.
The taxman added that the traders had not provided any proof indicating the alleged share transfer had been agreed upon by the directors.
In addition, the two Indian traders did not amend the iTax to reflect the transfer, even though the CR12, a document showing the directors and shareholders of a company, still showed that they were still the controlling directors of Family First Signature.
In December last year, the pair blamed Ms Mwihaki of failing to effect the change of particulars at the Companies Registry.
So, as the case continues, it is not clear whether the company, which Ms Mwihaki incorporated in 2007 is wholly hers or whether the Maldes still have a controlling stake.
Somehow, she has always emerged unscathed from most of these controversies. Not even a bitter court feud with her estranged husband, who accused her of exploiting him to build her business empire only to leave him high and dry, could bring her down.
You could call her the smooth operator; a woman who seems to have perfected the art of deal-making.
Chairpersons of various state corporations during a three-day inaugural conference of the State Corporation Advisory Committee Board at Lake Naivasha Resort on July 13, 2023.
Photo credit: Boniface Mwangi | Nation Media Group
There is little information to show how Ms Mwihaki stumbled upon her wealth, but a court case with her estranged husband Daniel Karriyo, gives a sneak peek at how she may have begun to build her business empire.
On December 2, 2008, Ms Mwihaki’s estranged husband accused her and some senior officials of a local bank of authoring a fake backdated loan offer letter.
Earlier in November 1999, Mr Kariiyo told the court that Ms Mwihaki had used his property in Garden Estate to take a loan of Sh3 million from Equity Bank, money that she used to boost her business interests.
According to him, he was entitled to half of the loan proceeds, but he didn’t receive a cent.
Mr Kariiyo, who told the court that he filed the suit after his wife left him, claimed that Ms Mwihaki repaid the loan using two family businesses he had entrusted her to run.
While the bank held the title deed for 36 months, he said his electronics business was “crippled” as he could not use the title to borrow cash to re-capitalise it.
He insisted that the loan was supposed to be for 12 months but was somehow extended to 36 months. He sought Sh23.5 million in damages from the bank for the losses.
“I filed this suit after my wife left me. If my wife had not left, I would not have filed this suit because we would have used the money as a family,” said Mr Kariiyo.
“The 1st defendant (the bank) was to blame for my wife leaving because there was a lot of relationship between the 1st defendant’s officials and her: business and personal,” he added.
His cries fell on deaf ears. Justice Hatari Peter George Waweru ruled in favour of Ms Mwihaki, who he said had applied for and repaid the loan, which had been secured by her husband, who “did not pay a single cent towards the loan repayments and never sought to do so.”
The judge added: “And that after repayment of the loan, the 1st defendant (Mwihaki) duly discharged the charge and released the title documents to the plaintiff (Kariiyo).”
Then she bolted away from him and built a business empire for herself and her children.
Ms Mwihaki did not respond to either our emails or phone calls.