Judge stops development on Sh3 billion Runda land

The High Court has stopped retired banker Francis Nganga and Kiambu Mall owner Peter Burugu from developing a 16.7-acre piece of land in Runda that collapsed lender Rural-Urban Credit is seeking to recover over unpaid loans.

Justice Alfred Mabeya last week ruled that nobody should interfere with the Sh3 billion property as he determines who between Rural Urban Credit, Mr Nganga and Mr Burugu can claim ownership rights to the land.

Mr Burugu has inherited a court case filed by a company he bought, Jumchem Healthcare, seeking ownership of the Runda land and to block Rural Urban Credit from selling the property to recover a Sh2.5 million loan from Mr Nganga.

Jumchem Healthcare in 1993 sought to buy the land from Mr Nganga.

Documents used for the 1993 transaction indicate that the land was in five parcels, and Jumchem claims that Mr Nganga failed to transfer two of the title deeds.

At the time of the botched transaction, Jumchem was owned by businessman Juma Muchemi. Mr Muchemi later sold his shareholding in the company to Mr Burugu, who inherited several court cases involving the property.

Justice Mabeya issued a status quo order, meaning the land should be left as it was last Monday, until he determines the suit.

Rural Urban Credit argues that Mr Nganga borrowed Sh2.5 million in 1982 while still working for the lender, and that the money was remitted on condition that he would surrender the Runda land’s title deeds and register them as security.

Missing case file

Mr Nganga failed to register the land as security despite receiving the money, Rural Urban Credit says in court papers.

The former banker claims to have bought the land by purchasing shares in its original owner, Williams & Kennedy, in 1982.

Rural Urban Credit joined the suit filed by Jumchem, but it had in 1995 sued Mr Nganga’s Williams & Kennedy in a separate case.

The 1995 case file has, however been missing for more than a decade, hence stalling proceedings.

Mr Nganga is facing repayment claims from another collapsed bank, Postbank Credit, which says in a separate case that it was also duped into releasing Sh9 million with a false promise that the Runda land would be registered as security.

The two lenders have sued Mr Nganga through their caretaker manager, the Deposit Protection Fund, which was in charge of managing failed financial institutions under the old Constitution.

Mr Nganga and Mr Burugu both claim that the land was first registered to Williams & Kennedy in 1977. At the time, Williams & Kennedy was owned by George Michael Kennedy, pleadings by Mr Nganga indicate.

Justice Mabeya’s orders now mean that no construction will proceed on the property.