David Murathe at EACC over Sh250 million Jirongo land saga
What you need to know:
- Murathe asked to explain the purpose of the Sh25 million he received from Mr Jirongo on July 23, 2020, which is part of an ongoing fraud investigation.
- Mr Murathe denied knowledge of the land deals that have put Mr Jirongo in trouble and maintained that the funds he received were to settle a debt the former Lugari MP owed him.
- The 2020 payment, Mr Murathe claims, was part of a Sh60 million debt Mr Jirongo had owed him for years.
Former Jubilee vice-chairperson David Murathe yesterday appeared before the anti-corruption watchdog to shed light on the millions he and other prominent individuals received from debt-ridden politician Cyrus Jirongo, who is linked to a series of controversial dealings with a piece of land in Nairobi.
The Ethics and Anti-Corruption Commission (EACC) summoned Mr Murathe to explain the purpose of the Sh25 million he received from Mr Jirongo on July 23, 2020, which is part of an ongoing fraud investigation.
Mr Murathe denied knowledge of the land deals that have put Mr Jirongo in trouble and maintained that the funds he received were to settle a debt the former Lugari MP owed him.
The 2020 payment, Mr Murathe claims, was part of a Sh60 million debt Mr Jirongo had owed him for years.
Mr Jirongo is at the heart of a 2.5-acre piece of land in Nairobi’s Mukuru kwa Reuben area, as it emerges that he may have tricked City Hall to pay Sh250 million for property it already owned.
The funds were released at a time Kenyans were bearing the brunt of the Covid-19 pandemic, and City Hall claimed to be broke as a result of stalled business and operations in the capital.
For more than three decades, the land served thousands of Mukuru kwa Reuben residents — it hosts two learning institutions, a clinic and a police station.
However, clandestine dealings by politically exposed individuals with the property have cost taxpayers millions and now risk leaving thousands of Mukuru kwa Reuben residents, who rely on the developed property, high and dry.
After City Hall released the funds, Kuza Farms sent Sh20.6 million to its owner, Mr Jirongo, before wiring Sh131 million to six prominent individuals.
The transactions attracted the attention of investigative authorities, which are trailing Mr Jirongo over the controversial land deals.
Cotu Secretary-General Francis Atwoli (Sh60 million), Pan-African Parliament MP representing South Sudan Albino Abuog (Sh38 million), former Vihiga Senator George Khaniri (Sh5 million) and former National Assembly Speaker Kenneth Marende (Sh3 million) were beneficiaries of the funds.
Mr Marende said that the Sh3 million he received as payment for legal services offered to one of his clients, who had a property tussle involving land in Milimani. He said the money he received was part of a Sh10 million fee note.
Mr Atwoli said, through Cotu head of communications Bruno Otiato, that the Sh60 million he received was on account of a court-ordered award.
The Cotu boss sued Mr Jirongo in 2017 seeking repayment of a Sh100 million loan. In the suit, Mr Jirongo said he was awaiting compensation of Sh250 million from City Hall in respect of the Mukuru kwa Reuben land.
Justice Francis Tuiyott in 2017 ordered Mr Jirongo to pay the Cotu boss’ debt, with Sh10 million interest.
Contacted for comment, EACC acting CEO Abdi Muhamud confirmed that the six individuals had been summoned to shed light on the funds they received. However, Mr Muhamud declined to give more details, saying he cannot comment on an active investigation.
The Nation has, however, established that Mr Jirongo has pocketed at least Sh1.85 billion from suspicious dealings involving the land, at the expense of taxpayers, while largely contributing to the collapse of a state-owned bank.
Following a curious court settlement in 2016, City Hall paid Mr Jirongo, through his Kuza Farms & Allied Ltd Sh250 million to buy the land, which it already owned.
In 1986, the Catholic church built AEF Reuben Primary School on the land. Four years later, Augustine Cheruiyot, an army major-general at the time, somehow managed to acquire a title deed for the same piece of land. He sold the land to Mr Jirongo in 1990. Mr Jirongo bought the land through his Kuza Farms & Allied Ltd.
In 1993 another firm owned by Mr Jirongo, Sololo Outlets, borrowed Sh1.65 billion from Postbank Credit Ltd. Mr Jirongo deposited the Mukuru kwa Reuben title deed with the lender as security.
He never repaid the loan. When Postbank Credit collapsed on account of politically connected individuals such as Mr Jirongo failing to repay billions of shillings they borrowed, the Deposit Protection Fund took over the lender’s management.
This meant that title deeds and other documents held by the bank were moved to the Deposit Protection Fund (now Kenya Deposit Insurance Corporation).
In 1998, the Catholic church transferred AEF Kwa Reuben to City Hall, meaning the school and the land it sits on became public property.
There was not much dealing with the land until 2014 when Mr Jirongo sued AEF Kwa Reuben and City Hall, claiming they had irregularly taken ownership of his property.
In his suit, Mr Jirongo argued that City Hall had completed compulsory acquisition by building the school, a vocational centre, a maternity clinic and a police station on the property.
The school had by then had possession of the property for 28 years. Under Kenyan law, if one possesses a piece of land for at least 12 years peacefully without interruption, they have a right to apply for its ownership documents under the doctrine of adverse possession.
It is not clear why City Hall did not put up a fight, at least under the doctrine of adverse possession.
Instead, Nairobi County opted to enter an out-of-court settlement with Mr Jirongo and agreed to pay Sh250 million for the land. Under the deal, Mr Jirongo was to clear any encumbrances on the land, including loans and unpaid land rent before receiving the Sh250 million.
The title deed is still in the possession of the Kenya Deposit Insurance Corporation (KDIC), which means Mr Jirongo may not have had sufficient grounds to file a suit claiming the prime property.
For an ownership claim to stick in court, one is required to give evidence. It is unclear why City Hall did not raise this in court before opting to settle with Mr Jirongo.
In direct violation of the court settlement, City Hall released the Sh250 million to Mr Jirongo before he had cleared the burdens on the title deed such as the loan and transferring ownership to Nairobi County.
“The value of the said land for the purposes of this compensation is hereby declared and agreed at the sum of Sh250,000,000 all-inclusive. The plaintiff (Kuza Farms) do ensure that all encumbrances over the said parcel of land (whether loans, statutory debts, rates or rents) are cleared in full which settlement will be conditional to the payment …” the settlement filed in court reads in part.
By the time of going to press, the EACC did not confirm whether it had questioned City Hall officials on the funds’ release.
Mr Jirongo’s lawyers wrote to the EACC claiming that he did not honour the summons on account of media presence, which he suspected was the result of a tip-off from the anti-corruption agency.