Lessons from court battle for Mbiyu Koinange estate

Former Cabinet minister Mbiyu Koinange. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Judge Muchelule observed that so many investors had put their money on the Koinange property even when they knew that there was a tussle in court.
  • Family members would sell property at will or lease it to third parties and what will emerge later is a litany of confusion and cases.

For the past 40 years, the family of the late Cabinet minister Peter Mbiyu Koinange has been at war because they could not agree on how to share his multibillion-shilling empire.

But they will now be the newest millionaires in town. Had Koinange, the one-time Pan Africanist, been alive, I would have posed the question: how did you amass all that wealth? But he is long dead.

The real story – the untold story – however - is actually not on the family wars, but on how Koinange acquired so much property after 18 years in government – and as a Cabinet minister. It speaks volumes of this country and its political elite.

Let me start with Confucius: “In a country well-governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”

Kenya is still a country of miracles; a country where politics is looked at as a better investment – thanks to patronage – than business.

One only needs to look at the Koinange portfolio and other Johnny-come-lately billionaires, to get a glimpse of a man who miraculously left so much wealth, yet there is so little evidence on what business miracles he performed.

Had he not been a politician, he could be a classic study on how to make billions – the way people study George Soros or Warren Buffett.

MEAGRE INHERITANCE

To contextualise all these, a Kenyan MP was by 1983 earning a basic salary of Sh5,500 per month. That was before madness set in. And that should be the amount that Koinange was earning, officially, as salary.

As a politician, he loved land and power - the two levers of influence that provided the post-independent politicians a platform to consolidate domestic control.

He was the closest you could get to President Jomo Kenyatta and he behaved like the country’s prime minister, when given a chance.

Interestingly, he had not inherited much from his father, Senior Chief Koinange wa Mbiyu, who only had 26 acres to give out to his six households.

The court was told that the Kenyatta Cabinet minister only inherited three acres (1.29 hectares) from his father or what is known as Kiambaa/Waguthu 2324 in the court records.

Chief Mbiyu was once a man of means. In his halcyon days, during the colonial era, he could afford to hire a Queen’s Counsel to defend his son, John Mbiu, who had been accused of masterminding the daylight assassination of Chief Waruhiu – the murder that triggered the October 1952 State of Emergency in Kenya and a crackdown on Kenya African Union (KAU) activists largely in central Kenya.

John was acquitted on the grounds that “the evidence of the confession, although admissible, had not received sufficient corroboration to justify conviction”.

His accomplices, the men who told the court that they had received the pistol from John Mbiu, the senior chief’s son, were found guilty of murder.

CLOSEBURN ESTATE

But Chief Koinange had apparently been impoverished by the colonial government, which not only jailed him for associating with Mau Mau but only released him after he got too sickly.

His last wife, Elizabeth Gathoni, told me a few years before she died that when the Senior Chief came back, he only lasted a few days and died – in penury.

That is the kind of family wealth that the young Koinange returned to after independence. He was lucky that the State of Emergency had not found him in Kenya, or he would have been part of the Kapenguria Six.

The British, during the State of Emergency, derided him as a ‘milkman’, for he earned his living while in exile by working at a dairy farm in Dollis Hill, northwest London.

But he was well-educated. He was the first Kenyan to earn a master’s degree after graduating from Columbia University in 1938.

Let us now look at some of his properties. The flagship of his empire was Closeburn Estate, which is described in colonial literature as “one of the most productive coffee farms in Kenya and the leading food factory for Nairobi”.

The farm was previously owned by Rob Grahame Bell, son of a solicitor, coffee planter and nurseryman, and a leading member of the Kenya Horticultural Society.

PLAN FOR DEATH

This family is today credited for introducing “many of the plants and shrubs that now beautify the Colony” ever since Lt-Col. J.W. Bell founded this farm.

By the time Koinange acquired the 640-acre Closeburn farm, it was one of the most profitable in Kenya and even early enough, the family was known for its taste of cars - including the Bentley standard four and a half-litre tourer.

They had named it after Great Britain’s Closeburn Castle and a neighbouring farm was named Tigoni after “Trigony House”, which neighbours Closeburn Castle.

The other story is what we all can learn from the Koinange family saga.

After being left with all that wealth, Koinange’s family started to fight among themselves. And for the past 40 years, they spent a fortune in the war.

Justice Aggrey Muchelule was even sorry for them. “One wishes that all Kenyans can get into the habit of planning their lives, and especially thinking about what will happen to their families and properties upon their death. It is not too much to ask that the planning be by way of writing wills.”

He described the tussle as “one of the longest running in the Judiciary” and said that there was an emerging trend among the rich families.

“Most of the cases involving rich polygamous Kenyans who die intestate have followed a similar pattern: lengthy and complicated litigation, attracting many advocates, and less intention on the part of the parties to bring the matter to an end,” he observed.

MISSING MILLIONS

Koinange had four wives and two had no children with him. But he had an empire: 4,292 acres in Mau Narok known as Muthera Farm, 465 acres Ehothia Farm near Banana Hill, Kiambu, Waehothia Farm in Limuru (198 acres), two acres in Industrial Area Nairobi, many plots and shares, and he also used to own the parking plot opposite the KCB headquarters in Nairobi.

He also had two beach hotels in Mombasa, buildings in Nakuru and Mombasa and a petrol station. In one of case, it was estimated that all these were worth over Sh10 billion.

One thing that emerged out of Justice Muchelule’s ruling was the question of what happened to Sh284 million, which was the balance after the court allowed the sale of 391 acres of Closeburn Estate to pay some debts.

The money was to be deposited into a joint account operated by lawyers Beatrice Kariuki, Alice Muthoni Wahome, Justry Nyaberi and Evans Monari.

That money was not to be disbursed without the authority of the court, but according to Justice Muchelule, the “money is no longer available at Eco Bank”.

Let me reproduce what Justice Muchelule said: “The advocates, according to their affidavits, withdrew the money, shared some of it to some of the beneficiaries and applied the balance to cover their fees and fees of other advocates, and other creditors. The record is clear that no order was made authorising the withdrawal of the money, or any part of it.

The advocates swore affidavits to say that there was some ruling by Justice Leonard Njagi that directed that all outstanding debts of the estate be paid from the monies. They said they were unable to trace the ruling in the file. They did not evidence any copy of the ruling.

I wonder on what basis Eco Bank released the money to the advocates. Did the bank see any order of the court authorising the release. I am sure if there was any order of the court authorising the withdrawal, it would have been produced. That is all that I would like to say about the money. This is because the advocates are challenging the proposal to prosecute them in relation to the money at the constitutional court in Nairobi.” So we have not heard the last about the missing Sh284 million.

EQUAL CLAIMANTS

The judge also observed that so many investors had put their money on the Koinange property even when they knew that there was a tussle in court.

Family members would sell property at will or lease it to third parties and what will emerge later is a litany of confusion and cases.

The owner of Ruaka Fiesta Bar claimed in court that he had paid one of Koinange’s son - David Waiganjo- some Sh77 million for his lease.

The judge observed that when he visited the estate, he found so many such developments. Some of these now risk losing their investments.

Justice Muchelule said: “An inter-meddler cannot possibly pass a good title to the buyer, even if the said buyer had no notice of the want of title.”

“The estate has four administrators. The law required that all of them jointly authorise the lease of any property of the estate to any third party. The other way of looking at it is that, if any administrator or beneficiary unilaterally sold or leased any part of the estate he will be solely responsible to the claimant. It would not be a liability to be borne by the estate.”

Another important element of this ruling is that the judge treated all the Koinange children as equal claimants to the estate.

In terms of law, Justice Muchelule voiced concern about the treatment of widows: “I have a problem with the Act when it provides that a widow be entitled to only personal and household goods, and that she gets only a lifetime interest in regard to immovable property.

I have a serious problem where the Act equates a widow to her children when it comes to the sharing of immovable estate of the deceased. These are areas of the Act that require immediate review, and alignment to the Constitution and the Matrimonial Property Act No. 49 of 2013.”

And that is an important victory for widows – thanks to the Koinange succession case – or as they say, every cloud has a silver lining.

TENANTS IN TROUBLE

Initially, the third and fourth wives - Margaret Njeri Mbiyu and Eddah Wanjiru Mbiyu - respectively, had been denied shares of the estate after High Court Justice W. Musyoka ruled they were not part of it.

Their claim was restored by the Court of Appeal, which asked the High Court to redistribute the estate afresh and with the two widows as claimants.

The problem, as noted above, is the fate of all those who have settled on Koinange land as tenants.

“There were a lot of complaints that either the administrators or some of the beneficiaries had intermeddled with parts of the estate by either selling, leasing and managing without authority and not accounting to the estate. For instance, there are many third parties occupying Closeburn Estate on the basis that they are tenants. One does not know how much rent is paid, and there is no account,” observed the judge.

Closeburn Estate has lost part of its land to developers: “I direct that the administrators move with due speed to measure the acreage of the estate using a government surveyor. The purpose will be the recovery of any land that the estate may have lost, and to cause the prosecution of any guilty party.”

Certainly, there are lessons from the Peter Mbiyu Koinange case. Many of them.

[email protected] @johnkamau1

Welcome!

You're all set to enjoy unlimited Prime content.