‘Connected’ trader paid Sh1.5bn despite order on prime city land

The payments were made by the National Land Commission (NLC) on behalf of the Kenya National Highways Authority (Kenha) following calls from “very powerful people”, the Sunday Nation has learnt.

In court documents obtained by the Sunday Nation, Simandi Investments Ltd says on February 2, the High Court issued an order barring or staying the release of any compensation by the commission on behalf of Kenha to Ms Macharia until March 4 when the judge was to deliver a ruling on an application for injunction.

Despite the interim court order, the State agency transferred funds for compensation in respect of compulsory acquisition of the City Cabanas land into Ms Macharia’s bank accounts on March 1.

The commission transferred Sh1 billion to her Equity Bank account, a total of Sh522.3 million to her KCB Bank account and Sh25 million to Ms Macharia’s  Guardian Bank account.

Ms Macharia has been involved in a dispute over the land with Mr Simon Ondiba, the owner of Simandi Investments Ltd.

Defeat of justice

The High Court on March 4 ordered that she be given half the amount of the compensation, with the commission retaining the rest until the case was heard and determined.

But by the time the directive was given, Ms Macharia had all the money.

On April 18, Simandi Investments Ltd moved to court on a certificate of urgency to file a petition against her, the commission and Kenha in an effort to freeze the businesswomen's accounts.

“On March 4, 2021, the first defendant/respondent’s counsel did not disclose the fact that the funds had been paid into the first defendant/respondent’s bank accounts and there were no funds being held by the second defendant/respondent (the commission). Parties need to exercise candour and disclose the material facts to the court at all times,” court documents filed by Simandi Investments Ltd indicate.

According to the documents, the funds left NLC’s bank account at the National Bank of Kenya into Ms Macharia’s accounts.

“Unless they are quickly, immediately and forthwith frozen, they run the danger of being withdrawn, transferred, utilised or otherwise lost. It is therefore important that urgent protection measures are issued,” Simandi Investments Ltd pleaded with the court.

The company argues that if the matter is not certified as urgent, the suit “is likely to be rendered nugatory and overtaken by events, a situation in defeat of justice”.

Simandi Investments Ltd adds that it stares at “an academic litigation, chasing wind”.

Mr Ondiba alongside Ms Mary Nyamanya, through Mwanyambori Investments Ltd, say they are the rightful and registered owners of the 3.689 hectare city land.

In the court papers, Mwanyambori Investments says it bought the said land from the Kenya National Chamber of Commerce and Industry for Sh60 million on July 19, 1994 with the transaction and transfer effected on September 8, 1994.

Mr Ondiba says when he visited the property in August 2016, he was dismayed and shocked to find two earthmovers carrying out excavations and construction materials on the site.

He adds that workers at the property informed him that they had been contracted to erect a permanent perimeter wall on the land.

The businessman says the commission investigated the matter and established that the land belonged to him.

He tells the High Court that he was then given permission to establish beacons on the suit property.

“That put differently, the National Land Commission did its investigations and/or inquiries, which involved writing to the Kenya National Chamber of Commerce and Industry (KNCCI) and the report came out that the suit property had not been sold or transferred to the defendant (Ms Macharia),” the court documents indicate.

Ms Macharia for her part, claims to have been in occupation of the suit property since 1994 and that she had established a hotel known as City Cabanas thereon which has been operating without any dispute since 1995.

She claims to have acquired the land from KNCCI at a cost of Sh45 million and that an informal transfer was effected on December 22, 1994.

The businesswoman says she used the land to develop the hotel and also charged the property to secure financial advances from several local banks.

“I verily believe that title L.R. No. 209/11293/1 (IR No.161289), purporting to vest the subject parcel to Simon Nyamanya Ondiba and Mary Nyamanya as from January 15, 2015 owes its origin and purported registration to acts of fraud by one Simon Nyamanya Ondiba, Mary Nyamanya and Laban Onditi Rao,” Ms Macharia says in her court papers.

Not very much is known about the businesswoman other than her connections to powerful individuals, especially in the regimes of Jubilee and Kanu’s Daniel arap Moi.

So connected is the woman that when Mr Ondiba was arrested in a case involving the property, the elderly man was escorted to court with five police vehicles in tow, an act ostensibly orchestrated to intimidate him.

Ms Macharia is said to have made a fortune during the Moi regime when she was among the first Kenyans to be allowed to import second hand clothes, then an exclusive business of the well-connected.

The businesswoman also featured prominently in the Euro Bank Ltd saga, following the collapse of the financial institution in 2003 with billions in shillings of depositors’ money.

The bank  went down with money belonging to several parastatals and other State-owned entities. 

After Euro Bank went under, the Deposit Protection Fund Board (its liquidator) took Ms Macharia to court over a Sh28 million debt, but she walked away without surrendering a coin.

Later, Appellate Court judges Alnashir Visram, G.B.M. Kariuki and J. Mohammed summed up the case in their introductory paragraph.

Non-person

“This appeal exemplifies how costly mistakes can be in pleadings. It also lends credence to the epitaph that the law is an ass. A word can make all the difference between a properly instituted suit and an incompetent suit,” the judges said.

Ms Macharia did not pay anything to the Deposit Protection Fund Board.

The three judges agreed that the Fund had no legal personality as it was instituted by the Deposit Protection Fund and not the Deposit Protection Fund Board.

“In his ruling delivered on January 16 2006, the learned judge found that the suit by the Deposit Protection Fund was instituted by a non-person as the Deposit Protection Fund did not have legal personality,” the Appellate Court judges said in their ruling.

“He observed that the suit should have been instituted by the Deposit Protection Fund Board which, under the law, has legal personality. He therefore struck out the plaint.”

In 1999, Ms Macharia took Daima Bank, another financial institution in liquidation, to court claiming special damages amounting to Sh7.9 million plus interest and costs of the suit running to millions of shillings.

She was taken to court by Kenya Post Office Savings Bank in the same year.

The bank was seeking orders not to pay her Sh5.6 million.

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