Rise and fall of Modern Coast: How ‘Ultimate leader’ fell

Modern Coast

Passenger Service Buses Parked at the Modern Coast Yard in Mombasa on July 8, 2020. 

Photo credit: Kevin Odit | Nation Media Group

“Are you afraid of heights, is flying too expensive, do you want to experience the thrill of a flight at a lower price? We are here for you!” is how luxury bus company Modern Coast describes itself on its website.

Last week’s Nithi Bridge accident involving the company’s bus in which 36 people died has cast a powerful spotlight on the firm.

Modern Coast whose marketing tagline is “The Ultimate Leader” was once the kings of the road in the Coast region.

The company’s buses ruled the region between 2010 and 2020, only to be pushed off the highway by the more convenient and comfortable 14-seater shuttles.

In the past three years, the company’s buses have been involved in fatal accidents within the country and at one point having its operations suspended by the National Transport and Safety Authority (NTSA).

On December 27, 2021, passengers escaped unhurt after one of the buses they were traveling caught fire at Bendera area along Chavakali-Kapsabet Road in Vihiga County.

And on November 3, 2020, another bus caught fire at Masimba township in Makueni county along Mombasa-Nairobi highway.

NTSA also revoked the company’s license after two of its buses collided at Kiongwani near Salama market along the Nairobi-Mombasa highway, leaving seven people dead and 60 others injured.

The incidents have not always been the story of Modern Coast Express Ltd which operates the buses since it was first launched at a Mombasa hotel over 12 years ago.

Upon the launch, the bus company was the talk of the town as its buses provided comfort and luxury to its passengers, disrupting the dominance of some of other major bus companies plying the Mombasa-Nairobi route.

It had executive buses which had comfortable seats in the first class which passengers had to pay an extra amount on top of the fares being charged for the services offered on board including wifi and snacks with a hostesses ready to assist whenever a passenger had an issue.

However, all that seemed to have changed following the death of businessman Shahid Perverz Butt, the owner of the bus company.

Hail of bullets

Mr Butt died in a hail of bullets on July 11, 2014 in Changamwe as he drove from Moi International Airport in Mombasa.

At the time he was facing charges of financing terrorism at the Coast.

Some of the luxurious services the bus company offered during its peak seem to be no longer available.

“I used to travel with their (company) buses and I can tell you they were very comfortable and offered top notch services,” said a regular traveler to upcountry.

Competition from the Standard Gauge Railway (SGR) also seemed to have had an impact not only on Modern Coast buses but other bus companies whose passengers shifted to the train.

Bus companies felt that SGR would force them to shut down due to the number of people who were travelling by train at the time due to the limited hours spent while travelling.

Following the death of Mr Butt, there was a fierce succession case battle over his properties involving his two widows and a son which was concluded in April.

The High Court judgment which settled the eight-year succession case gave a glimpse on how the deceased created his business empire that runs across East Africa.

Mr Butt was a shrewd businessman whose details about his wealth came into the limelight during the succession case which was filed in 2014 few months after he died.

Prior to his death, Mr Butt had also been arraigned in court on terrorism and incitement related accusations.

Although many people wondered how the late businessman started his businesses and created a business empire estimated to be Sh5 billion, the court’s decision revealed how Mrs Akhtar Butt, his first wife, played a role in the establishment of the companies.

The court noted that the foundation of all the companies was traceable to the business name initially operated between the deceased and Mrs Akhtar Butt and that they worked tirelessly but harmoniously in acquiring and incorporating the companies.

Mrs Akhtar Butt seemed to have played a pivotal role in the creation of the wealth by the businessman as the court in its decision noted that together with the deceased they started the businesses from scratch.

“From affidavit evidence before this court, we are left in no doubt that the deceased and Mrs Akhtar Butt started their business from the scratch by a business partnership which was later incorporated into Modern Coast Builders Company Ltd (MCBCL),” the court said.

The court further noted that the deceased and Mrs Akhtar Butt put in long hours to make the company a success and that other companies mushroomed from the funds obtained from MCBCL while others were acquired using resources from the company.

“No evidence was placed before the court to prove any impropriety on the part of the deceased in the way the company and their finances were managed,” said a three judge bench of the court comprising Justices Eric Ogola, Patrick Otieno and Njoki Mwangi.

Among the companies that were distributed between the deceased tycoon family members include Blue Bell Properties Ltd, Modern Coast Builders & Constructors Ltd, Pribhai Jivanjee and Company Ltd and Vantage Point Clearing and Forwarding Ltd.

Others are Modern Coast Road Transporters Ltd, Vantage Road Transporters Ltd, Modern Coast Express Ltd and Modern Coast Courier Ltd.

The court also noted that a number of motor vehicles were alleged to belong to the tycoon but according to the documents presented before it (court) only two belonged to him.

According to the court, the two vehicles are available as property of the estate for distribution to the widows and the children of the deceased.

The court directed that Mrs Akhtar Butt and Mrs Regine Butt receive 6.25 per cent each of the properties while Haroon Butt 35 per cent and two minors 35 per cent and 17 per cent each.

The court further directed that seven parcels of land be distributed among them on the same percentage.

Four bank accounts in the UK, Bermuda, British Isles and Imperial Bank Ltd were listed in the suit documents. Only the one in the UK was distributed among them.

The court also directed that any assets of the late tycoon’s estate which may have been inadvertently left out of the confirmed list of assets of the estate which may be discovered after the judgement and are subject to the distribution to the shares shall be distributed using the formula they have used.

“In accordance with the Muslim Law, Regine Butt and Haroon Butt be and are hereby appointed trustees of such bequests (property) as have been made herein in favour of the deceased’s children (two minors),” ruled the judges.

The court rejected a plea by the grandmother of the minors Mrs Roselinde Gudrun Ostertag who is the mother of Regine Butt, to be appointed trustee over any bequest made to them (minors).

``We decline the request by Roselinde Gudrun Ostertag and instead appoint Regine and Haroon as the trustees in guardianship of the two minors and their shares in the estate,” ruled the three-judge bench.

Mrs Regine Butt and her mother had wanted the court to declare that the deceased held the assets of the companies in trust for the estate.

However, the court ruled that none of the companies outlined in the pleadings in the case was wholly owned by the deceased.

“It is clear to us that the petitioners are surreptitiously urging us to lift the corporate veil by their proposition that the companies in issue are an alter ego of the deceased,” said the judges.

The court further noted that there were 11 properties mentioned by Mrs Regine Butt and her mother but without documents of title on record.

The three judge bench said that there were allegations and counter allegations on the properties with each side claiming and blaming the other side to be in possession.

“No evidence was led to the satisfaction of this court about the existence of such property, without evidence and ownership, we are unable to make any decision on the same,” ruled the judges.