Economy

Forgery costs media mogul SK Macharia Sh6bn land battle against Uhuru’s cousin

Summary

  • The NLC tribunal declared the 1997 sale of the land to Kenya-Re null and void, saying the 4.7 acre parcel that was part of the transaction property was Karura Forest land.
  • Mr Macharia had in a 2004 suit against the Attorney-General claimed that Mr Muigai and Mr Karanja were shareholders of Sceneries, but were unable to contribute capital that would have enabled them to earn their equal stake in the firm, forcing the media mogul and Mr Kibe to strike them out.

Media tycoon SK Macharia has lost a multi-billion shilling land battle against President Uhuru Kenyatta’s cousin, Ngengi Muigai, after the National Land Commission (NLC) found that forged documents were used in a land transaction that took place 20 years ago. 

Mr Macharia, former Land PS JG Kibe and businessman Solomon Wilson Karanja used forged documents to illegally amalgamate a 94.8 acre piece of land with another measuring 4.7 acres before selling the property to Kenya Reinsurance Corporation (Kenya-Re) for Sh550 million in 1997, according to an August 4, 2016 ruling by the NLC tribunal.

The three were Mr Muigai’s business partners and were at the time of the transaction co-owners and directors of Sceneries Limited — the company that bought the 94.8 acres from the estate of former President Jomo Kenyatta in 1988 for Sh500,000.

The NLC tribunal declared the 1997 sale of the land to Kenya-Re null and void, saying the 4.7 acre parcel that was part of the transaction property was Karura Forest land.

Investigations by the Directorate of Criminal Investigations (DCI) found that Mr Macharia, Mr Kibe and Mr Karanja, who sold the land to Kenya-Re to the exclusion of Mr Muigai, had forged title documents to show that the two parcels had been amalgamated.

The DCI investigators had in July 2015 written to the NLC and Mr Muigai’s lawyers confirming that the title deed used in the sale to Kenya Re was forged, terming it a “Kirinyaga/River Road title, which was pure fraudulent”.

Consequently, the NLC tribunal in its ruling ordered that the fake title be nullified, and the 94.8 acres that the trio co-owned with Mr Muigai be reinstated to Sceneries, subdivided and Mr Muigai given his portion.

“L.R. Number 216/8 measuring 38.39 hectares or 94.86 acres is reinstated to Sceneries Limited. Thereafter, it should be subdivided into four equal portions of 23.715 acres each such that the portion held by the directors of Sceneries that purported to sell L.R. Number 12236 (the amalgamated land) to Kenya-Re when it did not exist, is transferred to Kenya Re,” the NLC said in its ruling.

Earn their equal stake

Mr Macharia had in a 2004 suit against the Attorney-General claimed that Mr Muigai and Mr Karanja were shareholders of Sceneries, but were unable to contribute capital that would have enabled them to earn their equal stake in the firm, forcing the media mogul and Mr Kibe to strike them out. The duo was also removed as directors of Sceneries, a move they have contested.

The media mogul, in the suit filed at the High Court in Nairobi, had further argued that the removal of Mr Muigai and Mr Karanja as directors of Sceneries meant they had no right to question the 1997 sale to Kenya Re.

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During the NLC hearings, private investigator Antony Macharia made submissions indicating that Mr Macharia and Mr Kibe irregularly acquired the title deed for the 4.7-acre land that was revoked by President Jomo Kenyatta and used the deed to dupe Kenya Re into paying Sh550 million for the land.
Mzee Kenyatta bought the land from Joreth Limited but his family sold it to Sceneries 10 years after his death in 1978.

The NLC has also ordered that Mr Macharia, Mr Kibe, Mr Karanja and Kenya Re award Mr Muigai nine per cent of the land or its equivalent in cash as compensation for lost business opportunities during the protracted fight for it.

This means Kenya Re will either have to cede 6.4 acres of the land it has been awarded, or jointly with Mr Macharia, Mr Kibe and Mr Karanja pay President Kenyatta’s cousin Sh405 million going by Kenya Re’s 2014 valuation of the land at Sh6 billion.

“The directors of Sceneries Limited who sold their share to Kenya Re, and Kenya Re shall pay damages to Ngengi Muigai amounting to nine per cent of their share of land amounting to 6.4 acres or the equivalent in cash,” says the NLC ruling.

Mr Muigai’s total awards from the protracted legal battle will amount to Sh1.905 billion, which may skyrocket depending on how far the land has appreciated since the 2014 valuation.

The NLC further found that the title deed used in the Kenya Re transaction was registered after the Sh550 million deal was concluded, adding that it was “difficult to understand the interest that Kenya Re purchased.” 

Mr Muigai recorded a complaint with the NLC in November last year claiming his former business partners had locked him out of the 1997 land deal with Kenya Re.

Mr Macharia, the Royal Media Services founder and sole proprietor, moved to the High Court in May seeking to stop the NLC from hearing Mr Muigai’s complaint.

The media mogul says in court filings that the NLC process started without his involvement and that Mr Muigai’s witnesses testified against him without his presence.

Mr Muigai has, however, asked the court to dismiss the petition on grounds that Mr Macharia was not only aware of the proceedings but even participated in them by filing written arguments opposing the complaint.

But Mr Macharia argues that he only participated from March this year, long after NLC began the hearing.

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