Land fraud costs flower company Sh200m project

The future of a Sh200 million Naivasha flower company employing 640 people looks bleak after the High Court ordered it off the farm to allow the owner to repossess it.

Environment and Land Court Judge Justice Sila Munyao said that property acquired through fraud cannot be “cleansed” in any way, and the only remedy was for the flower company to vacate forthwith, unless they enter into contractual occupation agreements with the land owner, Mr Josphat Muthui Mwangi.

“Szaredo Investment Ltd had proposed that they be indemnified by the State as they had invested heavily on development of the farm. But the bottom of it is they bought the property from a non-existent owner via a fraudulent scheme. The land must revert to its original position before fraudsters struck,” he said.

Mr Muthui acquired the farm in 1978 when he worked in Naivasha as the area veterinary officer after he paid Sh42,000. Upon retirement, he relocated to Embu where he established a private school that he ran full time.

In his long absence, criminals colluded with land officials. A woman named Margaret Nyambura filed a succession case in court, claiming Mr Muthui was her husband and that he had died. She subsequently obtained a grant to take possession of the land on July 31, 2003 and proceeded to acquire title deeds for the 19 plots.

Lawyer Rupert William Milvan Watson represented Mr Peter Szapary, owner of Wildlife Ltd (an associate company of Szaredo Investments) in the transactions on sale of the property. Land searches were conducted, and it was established the land belonged to Margaret Nyambura.

Mr Watson said he met the “landowner” and her agent, James Mathenge Waiganjo, in his Nairobi home where the transactions took place.

Half of the purchase price, Sh1,832,400 was paid upon getting consent from the Land Control Board and the balance paid out after new title deeds were processed.

“I conclude my statement by saying that I had used Mr Mathenge’s services as a land agent in another land transaction that he performed services perfectly well,” said the lawyer who has been in legal practise in Kenya since 1979.

“I’m sorry for the investor, who claims to have acted in good faith, as the people who sold him the land were crooks (fraudsters). Since he has developments thereon, I allow him to continue occupying the farm till December 31, afterwhich he will have to either vacate the farm and remove all developments on it. He can also enter into negotiations with the owner and rent the same,” he ruled.

The court heard that when police were called in, they discovered Margaret Nyambura was a non-existent person and the deals were traced to a known fraudster, James Karimi Waiganjo, aka James Mathenge Waiganjo, who acted as an agent for Nyambura in the deal where Sh 1.8 million was paid out by the flower company and the property transferred to the new ‘owners’.

Mr Muthui’s lawyer, Kisilah Gor, demanded that Sh10 million be paid as compensation for loss of earnings and use of his property. The court observed that the land lay idle and directed that the government valuer conducts a valuation, with a report filed in the next one month.

Justice Munya observed that the flower company must be held liable for using the land for profit without consent from its owner since they had discovered the title deeds were fake but proceeded to develop the farm and utilise it.