Fresh fight over ex-spy chief’s wealth

One of the most expensive assets of former spy chief Joseph Kanyotu is at the centre of a fresh legal dispute over its alleged sale to a private company for Sh775 million.

The late spy chief’s two widows are in court over the ownership of a property that the first wife had sold to a third party, Westlands Residential Resort Ltd.

Mr Kanyotu’s first wife, Ms Mary Wanjiku, was earlier accused of altering the shareholding of Kawakanja Ltd — which owns the property that houses Sovereign Suites, an exclusive resort in Tigoni, Kiambu County —  and attempting to sell the palatial property to Westlands Residential Resort Ltd.

Her husband owned 999 shares in Kawakanja and one share was held by Tropical Registrars, but Ms Wanjiku is alleged to have increased the share holding of the company from 1,000 to 10,000 shares that she allocated to herself and her children.

But the court cancelled the changes and ordered that the original shareholding where Mr Kanyotu held the majority shares remain intact from February 13, 2008 when he died.

When the sale hit a snag, Westlands Residential Resort’s managing director Stanley Kinyanjui went to court seeking an injunction restraining the administrators from selling, leasing, mortgaging or transferring the property to third parties.

However, Mr Kanyotu’s second wife, Ms Jane Gathoni Muraya and a family member, Ms Margaret Nyakinyua Murigu — who are co-administrators of the Sh15 billion estate alongside Ms Wanjiku, stopped the application to compel the administrators to transfer the property to the company.

Court records show that Westlands Residential Resort entered into an agreement with Kawakanja Ltd to deposit Sh100 million and pay the balance of Sh675 million within 14 days after registration of the transfer of the prime property.

But Ms Gathoni objected to the agreement and the payment of the deposit on the basis that the property was the subject of a succession suit. Separately, the Kanyotu family is entangled in a protracted legal battle before Justice Luka Kimaru for the control of the multi-billion estate.

Ms Gathoni stated that she had made an application seeking the court’s approval of the sale to offset accrued estate debts.

Ms Gathoni told Justice Aggrey Muchelule through lawyer Judy Thongori that although she was not opposed to the sale of the property, such a transaction should be supervised by the court to protect the interest of all the beneficiaries.

However, Ms Wanjiku through her lawyer Nyiha Mukoma, and Kawakanja Ltd advocates Odhiambo Adala and Steve Mwenesi, urged the judge to strike out the suit on grounds that the property was agricultural land subject to the Land Control Act. She said the transaction had not received the consent of the Land Control Board.

Ms Wanjiku further argued that the sale agreement between Kawakanja Ltd and Westlands Residential Resort was undated and, therefore, void.

Further, she claimed the purported buyer had not deposited Sh100 million and had not paid the stamp duty as required under the provisions of Stamp Duty Act and could not, therefore, be admissible in court.

But Westlands Residential Resort lawyer Nelson Havi defended the transaction as having the blessings of the interim administrators and the succession court following the consent order signed by the parties.

Justice Muchelule in his ruling said the consent order had not directed that the property be sold to Westlands Residential Resort but the court had generally allowed the administrators to sell the property.

“The joint interim administrators may all have been in court on the day of the consent order but that is not the same as saying they all agreed to sell the property to Westlands Residential Resort,” ruled Justice Muchelule.

On the stamp duty, the judge said the court “cannot be used by parties who seek to avoid the payment of duty”.

He warned that a party seeking to use any unstamped instrument must demonstrate to the court that the omission to stamp the agreement was not a ploy to evade payment of duty or to defraud the government.

“Having found that the plaintiff (Westlands Residential Resort) has not demonstrated any intention to have the agreement stamped, the same cannot be used in evidence in this suit,” said the judge.

He consequently struck out the suit on grounds that the agreement was void for lack of stamp duty and consent of the Land Control Board.

Aggrieved by the High Court decision, Westlands Residential Resort moved to the appellate court where a three judge bench ordered the dispute to be heard afresh in the Environmental Court but on condition that the company deposits Sh100 million.

Appeal judges John Mwera, Mohammed Warsame and Gatembu Kairu, while setting aside the lower court’s findings, observed that the contract for sale of the property appeared to have been deliberately frustrated by the estate administrators because of their wrangles.

Mr Kanyotu, Kenya’s longest serving intelligence chief for 27 years, had until his retirement built an empire with extensive interests in hotels, banking, mining, insurance, real estate, aviation and large-scale farming.

Fact Box 

Mr Kanyotu partnered with Goldenberg architect Kamlesh Pattni in at least two companies, Exchange Bank and Goldenberg International, and was easily one of Kenya’s wealthiest men.

Mr Kanyotu’s properties include Half Moon, Full Moon and Cloud Limited. He also held  substantial shares in Barclays Bank, Sameer Group, Kenindia Assurance, Kentmere (1986) Ltd, Middle East Bank, Kenya Tea Development Agency, Kenya Melamine Manufacturers, Collindale Security and Collindale Limited.

He is as a shareholder of Kangaita Coffee Estate, Acacia Court, Acacia Renovators, Pine Court, Sonara Kwakanja Ltd, Shylocks Ltd and Metropolitan Health.

In addition, he owned land and buildings in Nairobi, Mombasa, Kiambu, Gilgil, South Nyanza, Kirinyaga and Nyandarua. In Kirinyaga, his ancestral home, he is listed as having acquired 37 parcels of prime land.

Conservative estimates value his investments at Sh15 billion.