Ferdinand Waititu loses Sh52 million in botched property deal

Former Kiambu governor Ferdinand Waititu has failed to overturn a court ruling that allowed a real estate company to forfeit Sh52 million he paid to acquire an office bloc in Nairobi’s CBD.

Mr Waititu wanted Justice Jacqueline Mogeni to set aside a judgment that awarded the property seller the deposit fee as damages for breach of the sale agreement.

But the judge dismissed the request after Mr Waititu's advocates failed to show up in court for the hearing of the review application.

The former governor had paid the money to General Properties Ltd in 2018 as a 10 per cent deposit for the purchase of the half billion shilling commercial building known as Solar House.

He was transacting using his company, Saika Two Estate Developers Ltd, which is among the entities that fell under the scrutiny of the State anti-graft watchdog, EACC, over allegations that he was using it to receive kickbacks from county government contractors. Mr Waititu is a director of the company.

Sh468 million

He was unable to complete payment of the property's purchase price amounting to Sh468 million after financial lenders failed to fund him, prompting the seller to seek court's intervention.

Last month on November 1 Justice Mogeni allowed the seller to retain the Sh52 million following a finding that Mr Waititu was in breach of the sale agreement for failing to conclude the purchase of the property within 90 days as indicated in the contract dated May 30, 2018.

The seller had also granted him more time to complete the deal but the impeached governor failed to get funding.

Feeling aggrieved by the ruling, Mr Waititu filed an application for review and set aside the decision.

"The plaintiff (General Properties Limited) should not be allowed to keep/maintain an advantage it has unfairly obtained. Our non-derogable right to a fair hearing has been flagrantly violated and can only be remedied by vacating the disputed judgment and allowing the defendant to defend the suit," said Mr Waititu's company.

He said the judgment was irregular, alleging that his advocate was neither invited by the advocate of the other side to fix a hearing date of the dispute nor was he notified about the proceedings.

But when the application was called for hearing on November 29 his advocates failed to show up in court prompting the court to throw out the application.

The advocate of the property seller, Anthony Wanyingi, tabled in court notice from the court's senior deputy registrar inviting parties for mention of the case in December 2019.

The lawyer also demonstrated to the court that Mr Waititu's advocate was invited again on two other occasions ahead of the hearing in April and June 2021. Mr Wanyingi added that Mr Waititu was granted a fair hearing since he had filed a defence and a counterclaim.

Sale of property

In the court orders, the lands registrar was directed to remove a restriction that had been placed by Mr Waititu to block sale of the property to any other party.

The property seller, through lawyer Wanyingi, argued that Saika breached the contract by entering into a sale agreement without sufficient funds to complete the transaction.

Mr Wanyingi further told the court that the sale agreement was approved by Mr Waititu's lawyers, who also advised him to execute it.

“Saika proceeded to execute the sale agreement and paid the deposit without first securing bank financing. It is the duty of every advocate for the purchaser to advise his client to source for funds first before committing himself in an agreement,” said Mr Wanyingi.

Agreement

“It was a condition of the agreement that time was of essence and that the balance of Sh468 million was to be paid to the vendor advocates within 90 days from May 30, 2018. The defendant (Saika) has blatantly breached the conditions in the agreement,” he added.

Court papers indicate that total monthly rent of the building as at year 2021 is Sh15.8 million.

In its defence, Saika stated that the information on the property’s income was presented in an unambiguous tabulation. Mr Waititu claimed that the property seller had defrauded him by misrepresenting the true income of the commercial building.

The company had approached Family Bank looking for a loan facility in order to pay the balance of the purchase price but the applications “were unusually rejected by the financial institution”.

It continued pursuing credit and it approached Cooperative Bank. After conducting due diligence and analysing the representations of the property vis-a-viz rent schedules and the tenants agreements, the bank discovered the rental represented was “false and grossly exaggerated”.

The Cooperative bank immediately abandoned the process of processing the credit facility.

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