A court has issued conservatory orders against a move by the Nairobi City County government to allow a private developer to use a title deed belonging to the county to secure a loan from a commercial bank.
The orders came after a lobby group known as Sheria na Watu petitioned the move by the county executive which was later taken to the assembly for approval. The petitioner argued that the move was against the law.
Members of the city county assembly in April approved a motion that recommended that Tecnofin Kenya Limited be allowed to use the title deed to secure a loan from the Kenya Commercial Bank (KCB).
According to the motion that was presented by Majority Leader Peter Imwatok, the developer had sought to use the county assets as collateral to raise funds for the completion of a housing project.
The MCAs’ decision came after Nairobi Governor Johnson Sakaja held a county executive committee meeting where it was resolved that the title deed be used as collateral for a loan for the Pangani Estate Urban Project.
This is not the first time Nairobi City County is giving away its assets as collateral for a loan.
The estate comprising 240 three-bedroomed residential units is now in the possession of Lapfund.
The Pangani Housing Project is a Public Private Partnership (PPP) programme undertaken by the city county government and was launched by then-President Uhuru Kenyatta on June 30,2020.
The project sits on a 5.2-acre property in the Pangani estate, which was developed in the 1950s.
The agreement also states that the city county government is only required to provide land for the projects while the responsibility of the developer is to raise funds and implement the projects.
According to the Registrar of Companies, Tecnofin Kenya Limited is owned by a web of other construction companies.
Epialces Investments Limited owns 39 per cent of the shares while Lee Construction Limited, owned by ex-Cabinet minister Simeon Nyachae’s son Lee Nyachae, owns 21 per cent of the shares. The remaining one per cent is held by Tecnofin Fczo.
