What you need to know:
- Four weeks after he and his friends were fraudulently allocated forest land, Hosea Kiplagat offered to sell it to NSSF.
- NSSF agreed to purchase it for Sh292 million.
- Hosea Kiplagat had done nothing on the land.
- Most likely, he didn’t know where it was.
“When karma comes back to punch you in the face, I want to be there. Just in case it needs help.” — Anonymous
I was shocked this week, but not surprised, that Kanu-era power broker Hosea Kiplagat’s Karen home and some of his assets were to be auctioned over a Sh378 million loan.
Karma is indeed real, for this is the man, now a pensioner, who in 1995 was part of a group that sold a non-existent 48-acre piece of land in Karura Forest, earning his one-year-old company Sh295.5 million of workers’ pension from the National Social Security Fund (NSSF).
That money was stolen and nobody is in court for it. It is also deemed to have been lost – because this was a collusion between NSSF trustees and a team that comprised Hosea Kiplagat and Marble Arch tycoon Mike Maina.
When the late Prof Wangari Maathai was being beaten up for protesting against the grabbing of Karura Forest, these are the “developers” who were part of that racket. They owe us an apology and our money.
The heist seems to have started in 1993. Mike Maina told a court that he was approached by Mr Kiplagat and told that President Moi had agreed to allocate them 50 acres of Karura Forest land. Because the land needed to be cleared, Maina’s Pelican Engineering Company Limited would be useful in carrying out the task.
Again, because of Kiplagat’s known connections with State House, and fearing that this would spark uproar, he wanted to hide behind another entity – a known company. Thus, Pelican Engineering Company Ltd, owned by Mr Maina, was asked to apply for allocation of land within Karura Forest.
Mr Maina would later reveal that Mr Kiplagat told him that “the deal was like any other deal”, and that “the allottees were powerful people in President Moi’s regime who needed somewhere to hide”. That is why they looked for him, Mr Kiplagat told him, as they did not want to come out as the beneficiaries of the said parcel of land.
Mr Maina agreed to hold Mr Kiplagat’s one share in trust and shield the long-serving Baringo Kanu chairman who was for years chairman of Co-operative Bank of Kenya. The duo of Maina and Kiplagat had also approached Nairobi lawyer Chege Kirundi to register a Special Purpose Vehicle to handle the land transaction. Thus, Kitusuru Limited was incorporated on October 19, 1994.
Even before Kitusuru Limited was incorporated, the Ministry of Environment and Natural Resources, then under John Sambu, wrote to Maina’s Pelican and authorised him to carry out cadastral survey inside Karura Forest – and, in essence, demarcate the land to be allocated to the yet-to-be-registered entity.
Why a private entity was allowed to demarcate government land has always intrigued observers. A government surveyor approved the survey on July 13, 1994, three months before Mr Kiplagat’s Kitusuru Limited was registered.
Two months after the company was registered and three days into the New Year of 1995, Pelican Engineering Company Limited wrote to the Commissioner of Lands, Wilson Gachanja, and asked him to issue the Karura allotment letter in the name of Kitusuru Limited, the SPV to be used in the heist.
The letter of allotment was issued on April 4, 1995 and, interestingly, was not copied to the Conservatoire of Forests – who would have raised concern since Karura was gazetted as a forest. But then, President Moi had issued an order to allocate the land.
Both Maina and Kiplagat asked their lawyer, Mr Kirundi, to hold the directorship of Kitusuru on their behalf, a commonly used, but legal, delegation of authority. By creating such a layer, both Maina and Kiplagat would permanently hide their acquisition of Karura Forest.
Mr Kirundi later told the court that at the time he was doing all that, he was not aware that the government was planning to allocate 18.41 hectares to Mr Kiplagat from Karura Forest, and that Mr Kiplagat did not want the grant to be in his name. Actually, Kitusuru Limited was a mere trustee.
Interestingly, Kitusuru Limited had no office. It was a briefcase company that operated from Mr Kirundi’s office on the ninth floor of Bruce House. It also had no bank account.
Four weeks after they were allocated the land, on May 3, 1995, Kitusuru Ltd offered to sell LR 209/12274 to the National Social Security Fund, the cash-cow for Kanu barons. Four months later, perhaps after a lot of lobbying, NSSF on September 28, 1995 agreed to purchase the Karura Forest land for Sh292.5 million.
It was easy money. Hosea Kiplagat had done nothing on that land. Most likely, he didn’t know where it was.
The agreement was executed by Mike Maina and Chege Kirundi, who had made payment amounting to Sh6.4 million as Stand Premium fee.
To give the deal some semblance of cleanliness, NSSF had instructed Lloyd Masika Valuers to value the land and file a report. The valuation report was finally tabled before the Board of Trustees for approval.
Initially, Kanu’s blue-eyed lawyer, Mutula Kilonzo, a well-known deal maker, had been approached by NSSF to act as their lawyer. He wrote several letters to Kirundi & Co Advocates, marked as ‘Strictly Private and Confidential’, informing the lawyer that he had instructions to act for NSSF in the purchase of the property. It is not clear at what point he was dropped and the law firm of Esmail & Esmail Advocates appointed to act on behalf of NSSF in the deal.
Finally, it was to Esmail Advocates that the Sh292.5 million was released on October 5, 1995. Later during the day, the property was eventually transferred to NSSF and registered on the same day. The following day, October 6, Mr Kirundi received a Sh292.5 million cheque. On October 7, he was asked by Mr Maina to dissolve the company.
There was something peculiar about this sale. The sale agreement was executed on September 28, 1995, and the completion date was on or before the 30th day of September 1995. That meant NSSF had less than two days to close the deal.
“It baffles this court why the Fund would allow such a short period for completion, given that most sale agreements give a period of 90 days as the completion period,” observed Justice Lucy Gacheru while throwing out a case in which NSSF wanted to recover its lost money from both Mr Kirundi and Mr Maina.
He was forced to pay it back to Hosea as he feared for his life.
While Mr Maina wanted Mr Kiplagat and former President Moi included in the case, it appears they were never served.
That is how NSFF was swindled by a fly-by-night briefcase company – but there was more than that.
Mr Kirundi told a Nairobi court that after this money was paid, he retained Sh5 million as legal fees and transferred the balance to the beneficiaries, Hosea Kiplagat and Mike Maina.
“But the next day, Hosea Kiplagat went for the money and he was forced to pay it back to Hosea as he feared for his life,” the court heard.
In essence, and if that is true, Mr Kirundi appeared to have earned nothing from the Karura deal, although Maina told the court that he was not an innocent advocate.
Maina said they all had agreed on what role each would play: “Hosea Kiplagat was to make sure he talked to the higher authority to ensure that allocation of the land was done, and also talk to people at the Lands office (while Mr Kirundi ) was a legal advisor to everyone.”
All this time, nobody at NSSF had seen the land – as they later claimed – yet they had released the money to their lawyer. Maina insisted that after he cleared the forest land, he never took any NSSF officials there, but he would now and then see Mr Kirundi and Mr Kiplagat going to the ground and showing some officials around.
Whether NSSF officials carried out any due diligence on their own will never be known. How much collusion there was between the Kitusuru Limited clique, President Moi and Ministry of Lands officials is a story for another day. But what we know from records is that the land was never degazetted, which rendered the entire process illegal.
It was only after Mwai Kibaki came to power that an NSSF official, Joel Ruto, went to look for the property. While the sale agreement was between Kitusuru Ltd and NSSF, Kitusuru Ltd was already dissolved vide a Gazette Notice No.4287 dated July 26, 1996.
Justice Gacheru said a “valuation could not be carried out without visiting the property that was to be valued”, and that “since the instructing client was NSSF, then NSSF cannot say it did not know the property was in Karura Forest”.
The court held that even if Kitusuru Ltd held a proper grant issued by the Commissioner of Lands, it was irregularly acquired. Though Kitusuru Ltd held a Certificate of Title, the route through which it can be traced was irregular.
As to whether Mr Maina and Mr Kirundi had participated in the fraud, the judge noted that Kirundi “only floated an offer to NSSF, which had an option of either accepting or rejecting”.
A letter from Mutula Kilonzo had told the NSSF that there was a beneficial owner to be paid through Maucho Co Advocates.
“It is clear NSSF was very much aware of what was happening. It cannot claim fraud on the part of Kitusuru Ltd alone. If there was fraud, NSSF was deeply in it. What is clear here is that NSSF and some government officials colluded to have the transaction carried out in such haste,” said the judge.
And with that, pensioners lost Sh295 million.