Suraya directors risk jail in estate transfer dispute

Directors of Suraya Properties, the developers of the multi-billion shilling Fourways Junction residential estate, face civil jail after one of the original owners of the land on which the houses are built filed a petition claiming that they have refused to compensate her in violation of a court order.

Nancy Wanja Gatabaki claims in a suit filed in court on Thursday that Peter and Sue Muraya are in contempt of court for allegedly failing to transfer to her property worth Sh323 million in 24 months as agreed in September 2011.

She had moved to the High Court arguing that while Fourways Junction estate was to be a joint venture between Suraya Property and the Gatabaki family, she had been sidelined and her shareholding watered down to her disadvantage.

But she withdrew the case after the Suraya directors agreed to pay her Sh725 million in an out-of-court settlement that was adopted as court order.

“This Court…to cite Mr Peter Kiarie Muraya and Mrs Sue Wacheke Muraya…being the directors of second defendant (Suraya Property Group Limited) for contempt of court and…order (the two directors) be detained in prison for a period not exceeding six months for disobeying the order in issue,” reads an order sought by Mrs Gatabaki. She claims that as per the consent, the property was to be transferred in two years, which lapsed on September 6, 2013.

READ: Gatabaki fights Suraya over Sh30bn homes

Mrs Gatabaki claims the directors filed an application in court last year seeking extension of period within which the property was to be transferred.
She opposed the extension requested, and the application was subsequently withdrawn.

She argues that the directors therefore have no basis for failing to comply with the orders.

The dispute hit the headlines in 2011 when she moved to court and threatened to put to a stop Nairobi’s Sh30 billion Fourways Junction.

Mrs Gatabaki had accused Mr Muraya and his wife of fraudulently transferring 200 acres to Muga Developers and used the property as collateral for two loans worth Sh2.1 billion from two banking institutions without her knowledge.

She also had claimed in the suit 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.

She further alleged that she was kept in the dark while all the changes, including the entry of a fifth shareholder, Frangie Investments, which was allocated a 12 per cent stake, took place.

In the initial agreement, Suraya Properties was to inject funds into the housing project while the Gatabakis’ contributed the land owned by Sagana Developers for a 50:50 stake in Muga Developers.

READ: Woman gets Sh750m for stake in prime city estate

But the deal was reached in order to withdraw the case after they agreed on an out of court settlement.

As part of the settlement, Peter and Sue Muraya, who are directors of Suraya Properties — the company that originally partnered with the Gatabakis in the real estate project —  agreed to pay Mrs Gatabaki Sh140 million within two weeks and another Sh262 million in six months.

She was to receive the remaining Sh323 million in form of residential apartments and land on the project site.

The directors agreed to transfer 24 three-bedroom apartments valued at Sh7.5 million each, six two-bedroom apartments valued at Sh4.9 million each and 12 three-bedroom villas with a market price of Sh9.5 million each as part of the settlement within 2 years.

Suraya Properties also agreed to allocate Mrs Gatabaki 3.6 acres of land within the disputed project area in 24 months.