Italian job: Kenyan officials pass buck over stalled Sh80bn probe
Attorney General Justin Muturi at County Hall in Nairobi on October 17, 2022. The Business Registration Service department falls under his office.
An investigation into the circumstances under which three Italians were dispossessed of their investment firms, scuttling their planned multi-billion shilling real estate project in Kilifi County has stalled amid a blame game by government officials.
Had the plan, mooted 17 years ago, succeeded, a mini city would have come up within Jimba and Chembe areas under the 550 million euros (Sh81 billion) project that would have earned the investors tidy profits.
The trio, who had landed in Kenya in 2005, thought they had it all figured out when they bought land in 2006, tapped on local contacts to get relevant regulatory approval and were on course to build the high-end properties for sale.
Mr Marco Alimonti, Giuseppe Pusterla and Bresciano Carlo Aldo were confident about the success of the project. After all, Aldo had other investments in Malindi and, more importantly, they had put up some initial investments to gauge the potential of their mega project.
After purchasing the initial three parcels measuring 90 acres, which are currently valued at Sh3.5 billion, the Italians had put up a 120-room resort in Watamu.
The establishment was initially named Ndovu Resort, but its name was changed to Watamu Bay Resort.
The resort was put up under Holborn Properties. They would later build residential units in the same area, Villa Susanna Le Pleadi and the Pata Pata Beach Club.
To help navigate the local bureaucratic process for the mega project, the three Italians had tapped four Kenyans and three fellow Italians for the huge investment that included villas, apartments for holidaymakers, a shopping centre, hospitals, a church and a mosque.
City "only on paper"
But the mega city was only achieved on paper as it fell apart after the purchase of the land. The trio claim their new partners ousted them from the shareholding of the investment vehicles and sold the land between 2015 and 2021.
Mr Cattani Alberto, whom the trio has granted power of attorney in the property tussle, says the ownership changes were uncovered shortly after the completion of the city’s master plan.
Mr Cattani now says the rival faction has also put up for sale the Watamu Bay Resort with a 10 million euro (Sh1.4 billion) price tag.
The Italians filed a complaint with the Directorate of Criminal Investigations (DCI) in December 2022, but six months later the probe has stalled and government officials are pointing fingers at each other.
A senior DCI officer told the Saturday Nation that he is aware of the matter but blamed the registrar of companies, whom he accused of frustrating their officers' efforts in getting the files.
“There is progress that has been made on this matter but there is a problem at the registrar of companies. The police have been looking for the files on the matter,” said the officer who declined to be named saying the matter no longer falls under his jurisdiction.
Director of the Directorate of Criminal Investigations Mohamed Amin. Mr Cattani Albertohas asked the DCI and Attorney-General to speed up investigations so as to save the planned mega investment from collapse.
The Saturday Nation contacted DCI boss Mohammed Amin but he did not respond to our calls and text messages.
Attorney General Justin Muturi acknowledged receipt of a copy of a follow-up complaint to the DCI by the trio dated January but told Saturday Nation that he had referred the matter to DCI to get more information.
“I reported the matter to the DCI when I felt I was not getting appropriate answers,” Mr Muturi responded, under whose authority the Business Registration Service (BRS) falls.
Contacted, Registrar General Jane Joram referred Saturday Nation to BRS.
“The Companies Registry is under the Business Registration Service. Please check for the direct contact of the Registrar of Companies from their website,” Ms Joram responded in a message.
The Business Registration Service asked Saturday Nation for an official email over the matter for an appropriate response.
The email with six questions to the Registrar of Companies was sent on Tuesday evening and the communication department acknowledged receipt.
Special-purpose vehicles
The mouth-watering deal for the three Italians had looked promising, prompting them, together with their local partners, to incorporate five special-purpose vehicles to hold the land, assets and resources required.
The special purpose vehicles were Bayview Properties Ltd, Holborn Properties Ltd, Denman Properties Ltd, Casuarina Commercial Centre Ltd and Antiochia Ltd.
Mr Alimonti, Mr Pusterla and Mr Aldo retained majority control - over 60 per cent - of the special purpose vehicles both individually and through three other companies they own – Rafic International Inc, Rosewood Properties Ltd and All of Us Investments Ltd.
However, 17 years later, instead of the dream city, the three frustrated Italians have been knocking on every door, seeking an investigation into how the shareholding of the five special purpose vehicles changed and the land earmarked for the project sold without their consent.
The trio have since given their power of attorney to Cattani Alberto.
The disputed share and land transfers have Mr Alberto, Mr Alimonti, Mr Pusterla and Mr Aldo on one side fighting the rival group that comprises the four Kenyans and three Italians.
The three Italians are minority shareholders. One of the Italians has since died. His wife has now been sucked into the property tussles. Two of the Kenyans are spouses, one is an accountant who was tasked with overseeing the project’s finances and the other is an advocate.
“All I want is for my clients to get back their properties because they are the genuine owners. We have reported the matter to the police, office of the Attorney General and also Registrar of Companies is aware of it,” Mr Catani told the Saturday Nation this week.
“I hope the police will get to the bottom of this matter and help my clients get back their properties," he added.
Mr Cattani says in the correspondence with the DCI that one of the Italians was brought into the investment group on account of his knowledge of the Coastal and Kenyan business environment, specifically the real estate sector.
“The scheme involved illegal removal of our clients from the companies; restructuring of shareholding structures without the consent of our clients, transferring of a property by the minority shareholder without the consent of our clients and swearing a false oath in the form of an indemnity deed with the aim of falsifying records at the Companies’ Registry,” reads a letter to the DCI and AG by Abdikeir and Associates Advocates, representing the disgruntled Italians.
Under Kenyan law, shareholding changes require consent through the form of documents signed by parties involved in the transaction, accompanied by their signatures. The documents are presented to the Registrar of Companies who then effects the changes in the firm’s ownership document dubbed a CR12.
Mr Alberto, Mr Alimonti, Mr Pusterla and Mr Aldo argue that they have never consented to any shareholding changes or sale of the prime land.
Mr Cattani has asked the DCI and Attorney-General to speed up investigations so as to save the planned mega investment from collapse.
He also wants the land sold to third parties reverted to the special purpose vehicles intended for the project.
Mr Cattani says the changes to the land and company ownership documents were done around 2015.
He wants the role of government officials in the questionable transactions investigated.
