Tatu City director charged with forgery in ownership row

The legal battle for control of Nairobi’s Sh240 billion real estate project dubbed Tatu City took another turn yesterday when the minority shareholder was charged with fraud.

Mr Steve Mwagiru, who has sought court orders to dissolve the company that owns the project, was accused of forging documents indicating that he and his mother, Rosemary Mwagiru, are the only bona fide directors of Tatu City.

Fellow directors, led by former Central Bank governor Nahashon Nyaga, are accusing Mr Mwagiru of using forged title deeds to discredit their shares in the firm.

Mr Mwagiru wants Tatu City Limited dissolved on the grounds that the majority shareholders led by Moscow-based investment bank Renaissance Capital, had blocked him from the running of the firm.

Court documents show that Mr Mwagiru was released on a Sh30,000 cash bail, for allegedly forging a document on June 10 this year, purporting it to be a genuine document issued by an assistant registrar of companies.

Should the court find Mr Mwagiru guilty of forging the documents, it could raise issue of who are the actual owners of the company.

The winding up petition by Mr Mwagiru shows that the seven Kenyan shareholders in the company transferred their interest to the Russian investment bank as a security for a $62.5 million (Sh5 billion) loan meant to kick-start the real estate plan early next year.

Renaissance Partners Investment Limited arranged the credit facility from a consortium of international banks in a deal it also backed up as a guarantor.

Mr Mwagiru is also accused of freezing Tatu City’s assets, grounding its operations and risking the sale of the vast land it owns for default on payment of the loan —which was borrowed on March 15.

“As a consequence of the petitioner’s unlawful interference with the properties and operations of the company, it has been disabled from meeting its obligations and faces the danger of enforcement of securities it offered the lenders,” say court documents.

Mr Mwagiru is also accused of seeking to abandon the project mid-stream in an attempt to avoid paying his share of the loan to the consortium of lenders. The warring shareholders are believed to own 11,040 acres spread across Ruiru, Thika and Juja — part of which is to host Tatu City.

Court documents list Cedar IV Limited— a fully owned subsidiary of Renaissance Group — as the 99.99 per cent owners of Tatu City Limited with Mr Mwagiru and his mother owning a share each.Other shareholders including Mr Nyaga, Mr Vimal Shah, the CEO of edible oil processor Bidco, Mr Dipak Shah, Mr Bhimji Shah, Ms Judith Nyagah, and Mr Tarunkumar Shah each of whom owns a single share in the firm. It is not clear from the documents how Renaissance Capital valued Mr Mwagiru’s interest in the company at 10 per cent in an e-mail dated September 3.

The fraud case, whose hearing will start on February 3, adds a new turn to the mega real estate project that is billed as Kenya’s single largest investment plan and showcase for Africa on the use of private money for urban renewal.

Tatu City project seeks to use private capital to construct a whole new city of 62,000 residents who will live in a well planned environment of manicured homes, office blocks, shopping malls and industrial parks on 1,000 hectares in Kiambu County, behind Kenyatta University.

The project is divided into 10 phases starting with the setting up of basic infrastructure in the first quarter of 2011 - which was to be bankrolled by the Sh5 billion credit facility. Already, other shareholders in Tatu City are calling for the courts to take action on Mr Mwagiru and his mother along with his lawyers P. M Wamae.