Economy

Land officials entangled in Tatu City fraud claims

TATU

Rendeavour Group country head Nick Langford. FILE PHOTO | NMG

The battle for Tatu City, the multi-billion shilling real estate project outside Nairobi, has taken a new turn after minority shareholders returned to court accusing their foreign partners of colluding with Ministry of Land officials to fraudulently remove a caveat that had been placed on the expansive property in order to sell parts of it.

Stephen Mbugua Mwagiru, a shareholder and one of Tatu City’s founders, says in suit papers he has filed at Thika Law Courts that the Chief Land Registrar lifted the caveat without informing the minority shareholders, who had placed the caveat nor issue a 45-day notice as required by law.

The minority shareholders had placed caveats on the Nine Tatu City land titles on June 10, 2010 forbidding any dealings in the properties to safeguard their interest.

Mr Mwagiru is in court for orders restraining the Chief Land Registrar and the Attorney-General from granting any further approvals for dealings on the land, a move that if granted could stall ongoing sale of plots in the prime estate.

mwagiru

Mr Stephen Mbugua Mwagiru, a shareholder and one of Tatu City’s founders. File Photo | Paul Waweru | NMG

Mr Mwagiru says the Chief Land Registrar removed the caveats in May 2012 before mailing the said notices to the interested parties as required by law.

“The caveats were removed by the first respondent (The Chief land Registrar) on the May 25, 2012, the date of the receipt of the application for the removal of the caveat, and even before the alleged notices were mailed, acknowledged and responded to by the interested parties,” Mr Mwagiru says in the suit, which also lists Rosemary Njau, Josephine Mwagiru and Anne Walker, who are also minority shareholders, as interested parties.

“The end result was the establishment of a well-crafted motive with the deliberate intention to collude, defraud and defeat the interest of the interested parties and myself in the companies and by extension the properties.”

The interested parties placed the caveat in 2010. The latest round of Tatu City battles has its roots in the High Court’s 2013 decision that rejected the minority shareholders’ quest to wind up the real estate project but instead asked the majority shareholders to buy out the minority shareholders.

The court had further directed that an independent valuation of the property be conducted in order to determine the true value of each share ahead of the settlement.

Once the valuation was done by an independent arbitrator, the two minority shareholders, Mr Mwagiru and Rosemary Wanja, would be paid for the direct one share they each own in Tatu city and sister company Kofinaf as part of the exit plan.

The minority shareholders had told the court that they own 14.5 per cent of Tatu City and 15.8 per cent of Kofinaf, a claim that the majority shareholders have dismissed.

The High Court, while admitting that the minority shareholders have manifested a desire to exit from Cedar IV and other foreign companies through which they own Tatu City,  found that it was only befitting that they should seek remedy from English courts and London Court of International Arbitration, which has the exclusive jurisdiction on such disputes.

The documents submitted in court indicate that the caveats were removed on May 25, 2012, the same day that Kofinaf Company Limited applied for removal of the caveats.

Mr Mwagiru and Ms Wanja are minority shareholders in Tatu City and Kofinaf Company Limited, the two companies that own the Tatu City land.

Chief Land Registrar Sarah Chelimo Maina, however, says in an affidavit that Kofinaf’s application was handled by an officer in charge of caveat removal, who dispatched a notice to the minority shareholders on July 6, 2012 and got the caveat lifted on August 27, 2012 having received no objection.

Postmaster-General M. Bosire in a memo dated August 4, 2014 addressed to the Attorney-General, however, contradicts the registrar’s position, insisting “no letter was handed to post office for the minority shareholders on the said date.”

Mr Bosire said the Ministry of Land had earlier listed letters to the minority shareholders on the posting book but never delivered the said letters for posting.

Mr Mwagiru in a suit filed at Thika Environment and Lands Court on April 19, 2018 is seeking restoration of the caveats and a temporary injunction prohibiting the Land office from registering any sub-divisions, sales, transfers, lease, and charges on the land.

He claims that Tatu City’s operations have been hijacked and taken over by foreigners whom he alleges have no valid work permits to live and work in Kenya.

Mr Mwagiru claims that some of Tatu City’s property has been fraudulently transferred to special purpose vehicle companies and others mortgaged to offshore financial companies, including a Russian financier, Renaissance Capital.

The minority shareholders further accuse their majority partners of failing to value the property as ordered by the High Court in 2013.

Mr Mwagiru says he has raised the issue with the Ethics and Anti-Corruption Commission to investigate the alleged fraud.

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