Home Business Collapsed credit banks at centre of Sh3bn property row

Collapsed credit banks at centre of Sh3bn property row

by kenya-tribune

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The fight over a 16.7-acre piece of land in Runda worth more than Sh3 billion has revealed how a shadowy non-existent firm was used to dupe two banks into issuing it with loans that were never repaid.

The two banks — Rural Urban Credit Finance Ltd and Postbank Credit Ltd — later collapsed under the weight of unpaid loans irregularly given to politically connected individuals.

Nearly two decades after Mr David Kimani bought and settled his family on the prime land, they now risk being rendered homeless as businessman Peter Mburu Burugu now claims to own the property.

While records at the lands registry show that Mr Kimani is the legal owner as well details of how the businessman acquired and subdivided the property, Jumchem Healthcare Ltd and Mr Burugu have claimed ownership of the property.

The land, originally part of a farm owned by a group of white settlers trading as Saint Benoist Plantation Ltd, has now gained a place in the history of collapsed Postbank Credit.


As Saint Benoist Plantation Ltd owners were mulling over shutting down operations in Kenya, they agreed to sell their assets.

In 1950, the company sold the land to another settler — Basil Mitton George — who in turn sold it to Zena Grace Lindsey 41 years later.

Ms Lindsey then sold the land to Mr Kimani, who says in court papers that he settled on the land with his family.

While some of the land’s history dating back to 1929, when it was still owned by Saint Benoist, is available in the Kenya Gazette, Jumchem and Mr Burugu now claim that the land was first dealt with in 1977, when it was allocated to a Williams & Kennedy Ltd.

Mr Burugu’s court filings do not indicate who owned the land before 1977.

Mr Kimani says he and his family live on the land and have subdivided part of it for commercial development.

But earlier this month, goons Mr Kimani claims were hired by Mr Burugu stormed the property and destroyed a gate and intimidated workers.

In court, where he is suing Mr Burugu and Jumchem for trying to defraud him of the land, the businessman has filed documents showing his purchase of the land, receipts from City Hall for annual land rates and applications for subdivision and development of the property.

Mr Burugu, however, says that former banker Francis Nganga bought Williams & Kennedy Ltd from George Michael Kennedy in 1983.

He has also accused Mr Kimani of using goons to kick Mr Nganga out of the property.

But Mr Nganga’s dealings reveal a chequered history with the land, as he is on the spot for allegedly defrauding two banks that later collapsed.

Interestingly, records at the Companies Registry seen by the Nation indicate that William & Kennedy Ltd was only incorporated on May 27, 2010 — some 27 years after the company allegedly sold the land to Mr Nganga.

The records show that William & Kennedy has six shareholders. But a closer look at the shareholder names indicates that the firm could be owned by just three individuals using different variations of their names.

For instance, there is a Mr Francis Ng’ang’a Gicharu and a Mr Francis Nganga Gicharo. The Mr Gicharo appears twice as different people.

There is also a Ms Amy Kagendo Gicharu and a Ms Amy Kagendo Gicharo.

Earlier court records indicate that in 1983, when Mr Nganga still worked for the collapsed Rural Urban Credit Finance Ltd, he took out a loan to buy the land from Williams & Kennedy Ltd.

The deal was to see Mr Nganga buy all the shares in Williams & Kennedy, which would in essence give him ownership of all the company’s assets.

Mr Nganga’s employer was to loan him the money for the deal and use the Runda land as security. But Mr Nganga never deposited the title.

After Rural Urban Credit collapsed, the Deposit Protection Fund (DPF) took over its operations and started pursuing Mr Nganga.

But Mr Nganga resigned and left with the file that had all the land’s history.

In 1992, Mr Nganga took out another loan from Postbank Credit and was to use the land as security.

Once again, he was somehow able to ensure that the land was not registered as security.

After Postbank Credit collapsed, the DPF took over its operations as well.

When it tried to pursue Mr Nganga and his company for the debt, he sued. But midway through the suit and despite an existing court order, the DPF claims he somehow sold the land to Mr Juma Muchemi’s Jumchem Healthcare Ltd.

Mr Muchemi then claimed to have sold the company to Mr Burugu, who now wants to evict Mr Kimani.

Today, the High Court will decide whether to restrain Jumchem and Mr Burugu from interfering with the prime property as it starts preparing for the second suit involving the same land.

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