Economy

Lawmakers summon EACC over sale of Integrity House

integrity

Integrity House, the Ethics and Anti-Corruption Commission headquarters in Nairobi. PHOTO | FILE

The Ethics and Anti-Corruption Commission has been summoned to a meeting with the Justice and Legal Affairs Committee to discuss the transfer of Integrity House to a company in unclear circumstances.

The meeting, scheduled for 10am on Tuesday at Continental House, is to discuss a report submitted to the committee in May that has been pending for more than two months.

The National Assembly had on April 22 resolved that the EACC report to the House the circumstances surrounding the ownership of Integrity House, where their headquarters are located.

In its report, the EACC cleared the sale of the building to Tegus Ltd, a company owned by lawyer Ahmed Adan and his wife Asmah Ahmed Adan, after another company paid Sh115 million to the Deposit Protection Fund to discharge it.

Among the key issues is the ownership of Sunnex Enterprises Limited, one of the major shareholders of Tegus Limited.

The property had been charged to the Deposit Protection Fund because it was owned by Revack Limited, a company that owed Trust Finance Limited Sh152.5 million. Trust Finance Limited was owned by the collapsed Trade Bank.

Revack Limited paid Sh115 million to the Deposit Protection Fund after its owners argued that this would be added to Sh356.8 million collected as rent since September 1998.

Revack had initially wanted to pay Sh80 million and attempts to sell the property had failed because of uncertainty on whether the lease given in 1931 would be renewed.

“Following this settlement, the Deposit Protection Fund board proceeded to lift the receivership and to discharge the property. The documents of ownership were released to Revack Limited,” EACC boss Halakhe Waqo said in the report.

“Revack then transferred the property to Tegus Limited for a disclosed consideration of Sh400 million,” he added.

Mr Waqo said their investigations had thus disclosed the circumstances under which the property changed hands and concluded: “There is no evidence to conclude that management of the revenue derived from the property in any way undermined the interests of the depositors.”

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In documents submitted to the committee earlier, the Companies Registrar identified the shareholders of Tegus Limited as companies called Watuwatu Limited and Sunnex Enterprises Limited, with a Rachel Wanjugu Muthui and Anish Doshi as directors and minority shareholders.

Watuwatu and Sunnex own 49 shares each while Ms Muthui and Mr Doshi own one share each. Watuwatu Limited is in turn owned by Ahmed Adan and Asma Ahmed Adan.

Both Tegus Limited and Watuwatu Limited were registered on the same date, March 13, 2013, and are situated at the same address, Bruce House on Standard Street in Nairobi.

The matter could also raise more questions because the EACC did not say who the owners of Sunnex Enterprises were, which the committee chaired by Ainabkoi MP Samuel Chepkong’a has been pushing them to do.

It did not also establish whether the Deposit Protection Fund took care of the interests of the depositors of the collapsed bank by paying them from the proceeds of the rent and the eventual lump sum payment.

Mr Waqo also appeared to have glossed over the fact, also mentioned in the report, that as of August 2001, when Trust Bank was placed under liquidation, the charge over the land was Sh614.4 million, which was on account of the accumulated interest.

This means that Revack Limited owed the bank Sh614.4 million, four times more than the Sh152.5 million it had taken as a loan.