Ex-MP Ndung’u Gethenji loses bid to control Sh20bn family estate

Former Tetu MP James Ndung’u Gethenji has lost his bid to regain control of his family's multibillion-shilling estate in Kitisuru, Nairobi, which is under the management of his elder brother Gitahi Gethenji and other shareholders.

The former MP suffered the setback after the Court of Appeal dismissed his request to suspend implementation of a High Court judgment that declared he had no powers to take over management of a company known as Kihingo Village (Waridi Gardens) Management One Limited, which manages the estate.

The High Court had also declared that he had no powers to appoint a director without the authority of the shareholders and the homeowners.

Mr Ndung'u wanted the appellate court to suspend the judgment dated November 2, 2020 pending the hearing and determination of his appeal.

He also wanted the judges to issue a temporary injunction stopping the implementation of resolutions of the company prepared by the shareholders and homeowners during a special general meeting held on April 13, 2019 at Capital Club.

Among the resolutions was election of new directors of the company, removal of Mr Ndung'u from the chairmanship as well as removal of his shares and representation from the board, administration and management of the company.

The appellate court said the reliefs sought were aimed at forestalling what had already been effected, namely registration of new directors and change of bank signatories.

Justices Roselyn Nambuye, Wanjiru Karanja and Hannah Okwengu said issuing the injuction orders sought by Mr Ndung'u would be in vain.

On the pending appeal, the judges said the decisions that will be made by the company, though adverse to Mr Ndung'u, are reversible.

He had said he was apprehensive the shareholders controlling the company may carry out transactions with third parties that may result in liabilities to the company.

"There is, however, no argument that such liabilities are likely to be irreversible, such irreversibility of the actions intended to be forestalled is the core criterial for holding that the intended appeal will be rendered nugatory," said the judges.

They further said Mr Ndung'u's application was incompetent because he filed it on behalf of the company without its authority.

In opposition to the application, his brother Gitahi told the court the two are both shareholders and directors of the company and he was a stranger to any company resolution authorising the filing of the application on behalf of the company.

Mr Gitahi also said the application was a nonstarter as all that his brother purported to forestall was effected long ago and the application was, therefore, an exercise in futility.

The company was registered on October 5, 2010; with Mr Ndung’u and Mr Gitahi as directors and shareholders, each holding one ordinary share.

The long-running court dispute involves control of the company that manages the high-end estate known as Kihingo village, comprising of 55 houses. The estate, which is reported to be worth more than Sh20 billion, sits on a 42-acre piece of land.

The court battle started after Mr Ndung’u appointed Mr Chacha Mabanga as a director of the estate’s management company in 2013.

Mr Ndung'u's move was based on an argument that he was the majority shareholder and hence had the power to make the decision.

But High Court judge David Majanja quashed the decision, saying Mr Ndung'u had no powers to single-handedly appoint Mr Mabanga as a director of the company.

The judge said Mr Ndung'u, either acting alone or with Mr Mabanga, could not authorise the filing of court cases on behalf of the company challenging resolutions of the disputed special general meeting.

The meeting, held at Capital Club, made attempts to remove the company’s 60 (Class B) shares, which had given the two siblings authority and control of the company.

The shareholders, who are also owners of the houses include Mr William Edward Pike, Mr Gitahi Gethenji, Naresh Mehta, Sheetal Khanna, Kishor Kumar Varsani, Mohan Singh Panesar, Samuel Mwangi Wambu and Varsani Harji Dhanji.

During the meeting, the eight shareholders had resolved to remove Mr Ndung’u, Mr Cecil Miller, Mr Eric Giovani and Mr Chacha Mabanga from the office of directors. They were replaced with Mr Varsani, Mr Wambu, Mr Panesar and Mr Pike.

An additional resolution was to remove Scribe Services and Woodvale Associates as the company’s secretary and auditors, respectively. They also agreed that Bustani Club, which is situated within the estate, was the property of the company and should benefit all the 55 occupants of the houses as they are also shareholders.

He had sued his brother and the shareholders seeking to stop them from interfering with his shareholding in the company.

[email protected]