Ndeta unveiled as deal-maker in big contracts club
Savannah Cement chairman Benson Ndeta at the company’s plant in Athi River. PHOTO | FILE
It has been a quiet but steady rise for a man who first broke into the public limelight as the youngest chair of a public company’s board.
That was nearly 10 years ago when Trade minister Mukhisa Kituyi appointed little-known Benson Ndeta to chair cement maker East African Portland Cement.
Mr Ndeta, then in his mid-thirties, quickly learned the ropes of corporate dealmaking, ending his term at Portland with a rich network of powerful friends with whom he set up a new cement firm, Savannah Cement.
In recent months, Mr Ndeta has covertly dipped his hands into a number of multi-billion shilling deals, a move that has turned him into one of the most aggressive dealmakers in town.
That has not come without a price. The flamboyant businessman has been in the eye of a storm that has not only revealed his razor-sharp business instincts but also left him with a public image nightmare.
An architect by profession, the aggressive pursuit of business has turned Mr Ndeta into a master of all trades with hands in manufacturing (Savannah Cement), communications (Rapid Communications), professional services (Inhouse Architect) and trade (Dante’s Peak).
He is one of the top shareholders at multi-billion shilling Savannah Cement where he doubles up as chairman.
Mr Ndeta is also the proprietor of Dante’s Peak, a consumer goods trader at the centre of a Sh1.2 billion sugar importation scandal at Mumias Sugar Company.
More recently, the Mumias deal and a series of legal suits filed against Rapid Communications, a consultancy where he is listed as a director, have kept Mr Ndeta in the news.
A recent audit of Mumias by the consultancy firm KPMG found that Dante’s Peak was contracted to import 30,000 metric tonnes of sugar to be sold during a 2013 production crunch at company.
Initially, the firm was to deliver 100,000 metric tonnes but the sugar miller reduced the amount to 30,000 tonnes.
Mr Ndeta insists that the deal was not the cause of Mumias’ troubles.
“A company the size of Mumias could not be felled by such a small transaction. Many other reasons, both internally and externally, led to the company’s decline,” he said.
Mr Ndeta said that contrary to the negative reports about his firm, Dante’s Peak won the Mumias deal in a tendering process.
“The management went through a selective tendering process. Five companies were invited to bid for a one-year deal and Dante’s Peak won the tender,” he said, adding that he does not know how the firm was listed among the invited millers.
The businessman denies having dealt with Mumias before or after the sugar importation deal that is touted as one of the many reasons that the sugar miller has risked closure.
The KPMG audit found that while the deal was intended to make Sh330 million for Mumias, it left the sugar miller reeling under a Sh765 million loss.
Mr Ndeta denies responsibility for the scandal and instead blames “sugar barons” who interfered with the delivery of 400 containers of sugar.
“The sugar was impounded by the Kenya Revenue Authority officials as soon as it had landed in Mombasa over allegations that it had been imported from a non-Comesa member,” he said, adding that the action was orchestrated by individuals who feared that Mumias would run them out of business if it were allowed to import sugar for sale.
Mr Ndeta says that is the reason the sugar was released immediately prices plummeted. The heavy losses that Dante’s Peak and Mumias incurred arose from the fact that the consignment continued to attract Sh1 million in rents, demurrage charges and penalties daily for the six months it was impounded. It all amounted to Sh765 million loss for Mumias.
Dante’s Peak suffered a Sh80 million loss, according to Mr Ndeta who insists the company fully financed the cost of importing the sugar.
“Mumias wanted me to import 30,000 metric tonnes in three equal batches and I made the decision to ship in the entire stock rather than buy it in bits,” he said.
The KPMG audit suggested that the sugar may not have been imported, but Mr Ndeta holds that his firm honoured its part of the contract and delivered in record time.
“Dante’s Peak brought the sugar in six weeks of the contract being signed and it puzzles me when people claim it did not have the financial muscle to import the sugar,” he said.
Mr Ndeta’s troubles mounted even before the dust could settle on the Mumias controversy; the communications solutions provider associated with him sued and got sued several times over a 7.5-acre piece of land in Nairobi’s Kileleshwa area.
Rapid Communications has also put the Savannah Cement chair on the spot over its role in a Sh720 million land tussle that has entangled UBA Bank, Dubai Bank and residents of the neighbouring Dik Dik Gardens Estate.
Mr Ndeta is listed as a director of Rapid Communications alongside Anwar Majid Hussein, Cairo-based firms Highfield Investment and Egyptian Electronic Technology and Advantage S A which is registered in the British Virgin Islands.
The firm has since defaulted on the loan it took from UBA, forcing the bank to put the charged 7.5-acre land up for sale. The land is owned by Albright Holdings, a property developer associated with Rapid Communications.
Dik Dik Gardens Estate residents now want the High Court to place a caveat on the land, claiming its title was issued irregularly.
Mr Ndeta admits having invested in Rapid Communications, but claims that he sold all his shares in the company to Mr Hussein in 2012, as did the other shareholders.
“We resolved to sell all our shares to Mr Hussein through the last board meeting held in 2012. The only reason we are still listed as shareholders is he (Mr Hussein) is yet to pay us for our shares,” said Mr Ndeta.
These and many other dealings have become the clearest indicators that Mr Ndeta has joined the top dealmakers club in town.
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