The National Social Security Fund (NSSF) has lost Sh293 million in a shady land deal carried out 24 years ago by reclusive city billionaire Mike Maina, lawyer Chege Kirundi and government officials.
In a protracted court battle that started in 2004, Mr Kirundi and Mr Maina spilt the beans on a wide-ranging conspiracy that led to excision of 45.5 acres of public land from Karura Forest to their private company that sold back the land to the government.
The land, though in a government forest, was allocated to Kitusuru Limited, a company associated with Mr Kirundi and Mr Maina, before being sold to NSSF at Sh292.5 million in 1996.
Shortly after receiving the money, the company was dissolved by its directors.
Other players mentioned in the loss of the colossal sum of the pensioners’ fund is Mr Hosea Kiplagat, a nephew of retired President Daniel Moi and a powerful operative during the Kanu era.
Mr Kiplagat was a long-serving chairman of Co-operative Bank and an executive officer of the Baringo Kanu branch.
“Kitusuru Company was dissolved in 1996, because it had outlived its usefulness and achieved what it had been formed for.
However, the directors never met to discuss the dissolution,” Mr Maina said in his evidence in court.
The NSSF board of trustees started efforts to recover the money upon realising it could not take possession of the land as it had been gazetted as part of a forest. That was when a new regime came into power; in 2003.
The evidence tabled before Thika Environment and Lands Court Judge Lucy Gacheru indicated the shady deal started in 1993 with the city billionaire and Mr Kirundi helping Mr Kiplagat get a piece of (public) land.
In his evidence, Mr Maina said the deal started when Mr Kirundi and Mr Kiplagat invited him to assist the latter get the land.
Mr Maina testified that the deal was like any other and that the allottees were powerful people in President Moi’s regime.
The unnamed powerful people needed somewhere to hide and that is why they looked for Mr Maina as they did not want to come out as the beneficiaries of the said parcel of land, he said.
In the deal, Mr Maina said they agreed on what each one of them would do and Mr Kiplagat was to make sure he talked to the higher authorities to ensure allocation of the land was done.
Mr Kiplagat was also to talk to people at the Lands office and Mr Kirundi was a legal adviser to everyone.
The lawyer and Mr Kiplagat approached Mr Maina for his company (Pelican Engineering Limited) to be used for the allotment, and the billionaire initially had no problem with that.
But he later changed his mind and reckoned it was better to form another company as he “did not understand what was happening”.
Through a letter dated July 28, 1994, the Ministry of Environment and Natural Resources informed the company that authority had been given to excise an area of about 18.41 hectares in Karura Forest for development.
The letter was signed by J.M. Mutie, for Director of Forestry and copied to the Permanent Secretary, Ministry of Environment and Natural Resources.
The company was also authorised to carry out cadastral survey in the said area in consultation with the government survey department.
The evidence tabled in court indicates Mr Kirundi and Mr Maina on October 19, 1994 incorporated Kitusuru Limited for purposes of allotment of the land by the Commissioner of Lands.
Neither did they – as the directors of Kitusuru – open a bank account for the company, nor did they have any agreement on how to operate it, though it was based in Mr Kirundi’s office on the ninth floor of Bruce House in Nairobi, where the meetings used to be held.
On April 4, 1995, Kitusuru Limited was issued with the letter of allotment and later a grant for the excised land was issued on June 21, the same year.
The evidence also shows that immediately after the Letter of Allotment was issued to Kitusuru Ltd and before the grant was issued, Kirundi & Co. Advocates sent a Letter of Offer dated May 3, 1995 to the managing trustee of NSSF.
In the letter, the company offered to sell the land parcel (No.LR.No.209/12274-Nairobi) which had been excised from Karura Forest to the said Fund. The said land was offered at Sh350 million and NSSF accepted to purchase the suit property.
Mr Kirundi said he was instructed by Mr Kiplagat and Mr Maina to write the Offer Letter to NSSF, with regards to sale of the suit land.
Though he was concerned on the legality of the grant, the document was issued by the government and he was convinced that the title was genuine and valid.
He stated that he followed all the procedures of the law and he had no reason to doubt that the government had not followed the laid-down procedures and law in excising the public land and issuing the grant.
He retained Sh5 million as legal fees but Mr Kiplagat went for the money and he was forced to pay it back as he feared for his life.
In her ruling, Justice Gacheru found that though land ownership documents held by Kitusuru Ltd looked proper and were issued by the relevant government officials, proper process and procedure were never followed to degazette the suit property.
“The court finds that this irregularity was occasioned by the actions of the government officials. These government officers who gave authority of excision of the suit land were from the Ministry of Environment and Natural Resources and the Commissioner of Lands who gave an allotment letter without ascertaining that the said land had been degazetted,” stated Justice Gacheru in the ruling made on November 22, 2019 obtained last week.
She added that there was no evidence that Kitusuru Ltd coerced the said officials to act as they did.
Further, the said officials had been entrusted to safeguard public property and they owed the public a duty of care, stated Justice Gacheru.
“If there was fraud, NSSF was deeply in it. Further there is no evidence. What is clear is that the plaintiff, some government officials in cahoots with other parties who are not in this suit colluded in having the transaction carried out in such haste. The plaintiff (NSSF) therefore was not an innocent purchaser without notice,” stated the judge.
What should have happened, according to Justice Gacheru, is that the NSSF Management Board that was in place during the transaction should have been held personally liable and surcharged for the loss.
“The NSSF board of trustees cannot try to recover the said money which was lost due to its own negligence and fraudulent action of the persons who were entrusted to take care of the workers’ pension,” the judge said.
