DPP Haji takes on KCB in Sh3.5bn Kenyatta kin property row
Captain Kung’u Muigai (left) and Director of Public Prosecutions Noordin Haji.
For the past 30 years, Captain Kung’u Muigai and his brother, Ngengi Muigai, have been fighting to save their Sh3.5 billion 442-acre farm in Thika, which had been auctioned by the Kenya Commercial Bank (KCB).
The duo had filed 18 cases to stop KCB from auctioning the farm, but without success. The matter had gone up to the Supreme Court and was even brought before a parliamentary committee. In 2007, however, KCB finally sold the land to Bidii Kenya, a real estate firm, for Sh70 million.
An era had come to an end, or so it seemed. In a new twist, however, a lawyer now claims that KCB forged his signature and the matter is now before the Director of Public Prosecutions.
As Noordin Haji’s office gears up for the reopening of the intriguing matter, it is turning out to be one of the longest-running cases in the Kenyan courts.
The ODPP has been seeking answers from KCB over the alleged forgery of a consent order that led to the auction. The question that has never been answered is whether the bank officials conspired to sell the property through forgery, an issue that was not addressed in court since there was no complainant.
Over the years, the multimillion-shilling case had centred on a consent order entered before Justice Erastus Githinji on May 4, 1992, between KCB and Benjoh Amalgamated Limited over loans taken by James Muigai, who was the late President Jomo Kenyatta’s youngest brother.
In the ‘consent’ order, Benjoh, and Muiri Coffee Estate, the guarantor, were said to have agreed to pay the outstanding amount before July 31, 1992, and should they default, the bank was at liberty to sell the properties and recover its money.
Benjoh and Muiri companies protested against the order, arguing that they had not given instructions to the lawyer.
By the time Nairobi lawyer Gideon Kaumbuthu Menye asked the Director of Criminal Investigations to investigate KCB for forging his signature, some five years ago, the Kenyatta kin had lost a string of cases.
While the investigations on Menye’s forged signature appear to have moved at a snail’s pace, the ODPP this year returned to the police file and wrote to KCB demanding answers since the sale was allegedly premised on a non-existent decree or forged consent.
It is this renewed interest that has added weight to the saga.
It all started in 1989 when Benjoh Amalgamated took a KCB loan to grow flowers in Kinangop for export to Europe. In the arrangement, Benjoh was to take a Sh1.8 million overdraft while the bank, in what was a joint project, would offer a Sh21.2 million long-term loan with a tenor of eight years.
The KCB-Benjoh agreement was signed in April 1989, and the bank’s duty was to pay supplies and contractors directly.
Ngengi Muigai’s Muiri Farm guaranteed Benjoh a limit of Sh11.5 million.
At its peak, and every week, Benjoh was exporting five tonnes of flowers to Holland and had entered into an airfreight agreement with Express Kenya, which the bank would pay. But the bank, according to court records, later stopped the payments, and Express Kenya stopped airlifting the flowers.
As a result, the family watched their project halt as no cargo company was willing to engage a firm belonging to opposition politicians.
The saga between the two brothers and the bank started when Benjoh Amalgamated demanded to be shown the accounts indicating the suppliers, shippers and contractors the lender had paid. According to the records, KCB sent auctioneers to Muiri’s coffee farm – which was the loan’s guarantor.
Benjoh then filed a case in court demanding the bank statements and for breach of contract. Although KCB did not file a defence, a consent judgment was entered before Justice Erastus Githinji in the presence of counsel for both parties.
In the ‘consent’, Benjoh and Muiri Coffee Estate were said to have agreed to pay the outstanding amount before July 31, 1992, and should they default, the bank was at liberty to sell the properties and recover its money.
Shortly thereafter, the entire file disappeared – and has never been found, together with the ‘consent order’. Benjoh and Muiri claimed that they had not instructed any lawyer to act on their behalf.
Meanwhile, worried about his properties, the 86-year-old James Muigai, on December 14, 1994, paid Sh6 million to the bank, and the bank acknowledged that the balance was Sh3.5 million. But Muigai died 16 months later, on March 8, 1996.
The bank then wrote to his widow, Minie Ngina, demanding Sh44 million. The matter was reported to the Criminal Investigations Department (CID), and a KCB official and a lawyer were charged with conspiracy to defraud. When they were released on bond, the Attorney-General, Amos Wako, entered a nolle prosequi.
On October 27, 1997, Capt Kung’u made an application for a review of that consent order and told Justice Githinji that the lawyer who appeared on behalf of Benjoh Amalgamated had no such instructions. Further, he argued that the consent was missing from the file. Justice Githinji then set aside the consent order arguing: “This court is a court of records…where the original record is lost, and certified copies of the record and judgment or order made by the court are not available at the time of the hearing, an application by a party challenging the judgment has to succeed ex dihito justitiae (as of right).”
KCB appealed this finding, and Justice Otieno Kwach, Justice P.K. Tunoi and Justice Samuel Bosire disagreed with Justice Githinji saying such a move would provide a “field day for unscrupulous litigants” who wished to obstruct the course of justice. “If by simply arranging for the court records to disappear you can put back the clock and postpone the day of reckoning, the courts will be forced to enlist the services of armed guards to secure the safety of its files.”
Another attempt by the DCI to have bank officials record cautionary statements on how the debt rose from Sh3.5 million to Sh44 million was thwarted by the courts in petition 218 of 2011. Further, Justice D. Majanja stopped the DCI from investigating “in any way, summoning, or arresting” petitioner officers in the dispute between Benjoh and KCB. Though the Attorney-General appealed the ruling, his appeal was thrown out.
After a string of losses, the two Kenyatta kin brothers appear to have resigned to their judicial fate until the lawyer emerged five years ago. As Haji’s office seems to have a new interest in the case, it will be interesting to see how he will navigate a matter that has been to the apex court.
The DPP has noted, in one of his letters to KCB, that after perusing the police file, and Mr. Menye’s complaint that “there is overwhelming evidence to demonstrate culpability of Kenya Commercial Bank and Bidii Kenya Limited in the commission of offences including conspiracy to defraud contrary to section 317 of the penal code.”
On June 7, the DPP once again wrote to KCB seeking to have the matter resolved ‘amicably’. From the letter, it seemed that the KCB Board of Directors had reached a decision and conveyed the information to the complainant, Mr. Menye: “The complainant in the matter has informed us that the Bank through its Board of Directors has made a resolution regarding the subject matter full fact whereof are well within your knowledge.”
The DPP went on: “This office has not received any communication from your end regarding the same and we would appreciate if you could give us your position on the matter knowing that the Board members had committed to settling the same out of court, to pay the buyer and recover the title for onward transmission to Muiri Coffee Estates Limited. It is a matter we firmly believe you can, as parties, resolve amicably.”
Was KCB seeking a way out – or could it still hang on a Court of Appeal observation on the missing consent order?
Over the years, questions had been raised on whether the two brothers were victims of the Kanu-era mischief – and whether this was the price they had to pay for joining opposition politics in the 1990s.
And now, a multi-million saga rests on a single lawyer, who is alleged to have signed the consent order.
