Telkom seeks to overturn criminal trial in Sh14bn city land dispute

Telkom Kenya has taken legal action against a magistrate’s ruling that allowed members of a cooperative society to privately prosecute its senior officials, among them CEO Mugo Kibati, over a disputed 60-acre land on Ngong Road.

In a petition certified as urgent, Telkom argues that criminal proceedings initiated by officials of Postel Housing Cooperative Society is targeting executives and directors who were not in the telco when the land deal was brokered in 1993.

The telecoms operator says the criminal suit is a ploy to force the firm to drop its pursuit of the disputed land, which the High Court in April ruled belongs to Telkom Kenya.

Senior principal magistrate Kennedy Cheruiyot on October 8 allowed officials of the society to privately prosecute the former and current directors on grounds that they sold the land to a third party in 2011 despite the property having been transferred to Postel in 1993.

Besides Mr Kibati, those cited in the private prosecution are former Telkom CEO, Mickael Ghossein and directors Dorcas Kombo, Eddy Njoroge, Jinaro Kibet, Sayyid Said.

Telkom Kenya has sought High Court action to block the private prosecution, arguing that the dispute is a civil case and not a criminal.

Still, the firm says the targeted directors were not board members ahead of 2011, and, therefore, not involved in dealings touching on the property.

Mr Njoroge joined the board in 2011, Mr Kibati (2018), Mr Said (2016) and Ms Kombo and Mr Kibet were appointed in 2017.

“It is a travesty of justice for the police to be involved in the settlement of what is purely a civil dispute being litigated in court,” the petition stated.

The High Court is yet to make a decision whether the transfer of the land from defunct Kenya Posts and Telecommunication Corporation — which was split in 1999 to Postal Corporation of Kenya, Telkom Kenya, the Communications Commission of Kenya (now Communications Authority of Kenya) — to a firm associated with controversial businessman Francis Mburu is valid. Justice Ngenye Macharia had earlier nullified an arbitration award of September 2019 that ordered Telkom to hand over the 60-acre land in Jamhuri Estate along Ngong Road in Nairobi to Exclusive Estates Limited (EEL), which is associated with Mr Mburu.

Justice Macharia agreed with Telkom that the arbitrator-- Zehrabanu Janmohamed-- re-wrote a contract between the parties by directing Telkom to accept Sh21 million for the land.

Although Mr Mburu did not purchase the plot, the arbitrator handed him the land on grounds that a deal he had entered into with a State agency to develop the property about 30 years ago gave him legitimate claim to the land.

Ms Janmohamed ruled that Mr Mburu is entitled to 60 acres from the 79-acre parcel of land.

In 1993, KPTC excised part of its land and transferred it to Postel Housing Cooperative Society Ltd on January 19, 1993, for the construction of houses for its workers.

HOUSING PROJECT

Postel Housing Cooperative Society then entered into an agreement with Mr Mburu’s EEL for construction of the homes in a deal that offered the tycoon’s firm the 60 acres for Sh21 million. The housing project collapsed and the transfer of the land was frozen.

Ms Janmohamed termed the deal valid and directed Telkom to subdivide the land within 90 days and for Exclusive to pay Sh21 million for the property.

But Telkom Kenya through Kamau Karori argued that the award wrongly offered the land to Exclusive for a paltry Sh21 million, arguing that the land is worth more than Sh6 billion.

Telkom then challenged the decision and successfully convinced Justice Macharia to overturn the arbitration.

The contested land has since been forcibly taken over by the State and a stadium is being erected on it.