Uchumi Supermarkets has sued the government and a company owned by the families of former President Daniel arap Moi and Joshua Kulei over a 20-acre piece of land along Thika Road.
The retailer has been embroiled in a cold war with the Kenya Defence Forces (KDF) since 2019, when armed military personnel dramatically drove into the disputed property and occupied it on orders from their commanders and the Defence ministry.
And for the fourth time in 17 years, Uchumi has asked the High Court to declare it the valid owner of the prime property.
Uchumi argues that if it cannot be awarded the land, the government should be ordered to compensate it for the property.
The retailer holds that the compensation should be equivalent to the value of the land. The last valuation of the property, which was done in 2018, indicated that it was worth Sh2.4 billion.
The current value could be closer to the Sh3 billion mark, going by real estate trends in Kenya.
Despite not issuing any public statements, the KDF has stuck its ground, claiming to have attained the land in 1985 through compulsory acquisition.
Uchumi argues that it bought the land from Solio Construction, a firm owned by the Moi and Kulei families, for Sh85 million in 2001. The transaction was done through the retailer’s subsidiary, Kasarani Mall Limited.
The retailer adds that the government acknowledged Uchumi’s ownership over the years through the National Land Commission (NLC), Nairobi County, the Ministry of Lands, the Kenya Revenue Authority, the Attorney-General, Director of Public Prosecutions and the lands court.
Uchumi has sued the Defence ministry, Attorney-General Kihara Kariuki, Registrar of Titles and Solio Construction. The NLC and KCB Bank have been enjoined to the suit as interested parties.
None of the parties enjoined in the suit has filed responses.
Justice Oguttu Mboya has given parties in the case 14 days to file their respective responses. The judge will mention the case on February 22 to confirm if everyone will have complied with the orders.
Uchumi CEO Mohamed Mohamed argues that the land has been used as security for loans from KCB, East African Trade and Development Bank and UBA Bank among others, and that the lenders also did thorough due diligence that listed the retailer as the owner of the property.
He adds that after the KDF forcibly occupied the land in 2019, Uchumi did further due diligence which still revealed the retailer as the valid owner.
In 2008, the Directorate of Criminal Investigations (DCI) probed Uchumi’s purchase of the property following allegations that there was collusion between the retailer and Lands ministry officials to irregularly transfer the land.
Kasarani Mall Limited
But the investigation gave the transaction a clean bill of health.
“Kasarani Mall Limited has in its possession correspondence between the Director of Criminal Prosecutions, the office of the Attorney-General and the Ministry of Lands confirming the recognition of the plaintiffs’ title as valid. Kasarani Mall Limited has been paying land rates to Nairobi County in respect of the suit property. The NLC has also been demanding and accepting payment of annual rent,” Mr Mohamed says in court papers.
Uchumi has pegged its revival on the prime property.
In 2018, Uchumi had agreed to sell the land to Jewel Complex Limited, a firm owned by top officials of Jesus Winners Ministry in Roysambu, for Sh2.8 billion.
Uchumi had already received a Sh300 million deposit from Jewel Complex when the KDF took possession of the land in January 2019.
“Uchumi has presented the sale of the parcel to finance the turnaround plans of the company and partially to pay the creditors. There will be further losses to creditors and shareholders of Uchumi Supermarkets PLC,” Mr Mohamed adds.
The retailer has in the past fought Njathaini Electricity Project, Roysa Self-Help Group and Sidhi Investments in court.
Njathaini and Roysa are self-help groups that claimed ownership of the land on account of adverse possession. Uchumi won both cases against the groups.
Sidhi Investments had struck a deal with Uchumi to purchase the land in 2005 for Sh118 million. After paying a Sh11.8 million deposit, Uchumi advertised the sale afresh.
Shidhi Investments sued to stop the fresh sale, but Uchumi opposed the suit. The High Court ordered that the suit should proceed, but Uchumi appealed the decision.
In 2019, the Court of Appeal ordered that the suit proceed. Uchumi and Sidhi Investments have since entered into out-of-court talks, but the KDF occupation of the land may complicate matters.