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Charity Ngilu drawn into plot to defraud State of millions

Lands Cabinet Secretary Charity Ngilu. She has created a new post in the ministry that is not in the laws

Lands Cabinet Secretary Charity Ngilu. She has created a new post in the ministry that is not in the laws

Lands Cabinet Secretary Charity Ngilu has been sucked into a suspected fraudulent scheme through which wheeler-dealers are targeting hundreds of millions of shillings of taxpayer money through her ministry.

The scheme involves prime land in Nairobi, whose ownership was illegally transferred by well-connected individuals, who turned around to sue the government when the ministry revoked the title. The slightly over one acre parcel in Westlands nearly became a diplomatic issue as it belongs to the Kingdom of Kuwait, which complained about its illegal transfer.

According to documents seen by the Sunday Nation, the suspected fraudsters have roped in influential public servants in the scheme and are now in court demanding Sh2.3 billion compensation from the government. The sum includes Sh1.6 billion in “loss of profits for the expected development”.

The Sunday Nation has established that the cleverly designed conspiracy is the main reason why Mrs Ngilu revoked Lands Secretary Zablon Mabea’s authority to sign title deeds last week and replaced him with Mr Peter Kang’ethe Kahuho — designated as Director General for Lands. The unilateral action on Mr Mabea and the appointment of Mr Kahuho to a position that is non-existent in land laws has caught the attention of Parliament.

Leader of Majority Adan Duale on Thursday referred the matter to the Parliamentary Committee on Lands, which is expected to investigate it and report back to the House on Wednesday.

“This is a serious constitutional issue and there is nowhere in law for Director General of Lands,” said Mr Duale, while responding to a question by Kirinyaga Central MP Joseph Gitari.

Earlier in the week, Mrs Ngilu had defended her actions. “We are not fighting anybody. We are doing what is for the good of the country,” she told reporters.

The scheme to steal the Sh2.3 billion of public money kicked off with a suit filed against the government by a company known as Shimoni Resorts Ltd, which claims to have bought the land from Miniscule Investment Ltd for Sh130 million on December 8, 2009.

Miniscule had on its part bought the land from Koibarak Trading Company Ltd for Sh1 million in September 2002. The land was then used to acquire a loan of Sh50 million from the African Banking Corporation on December 8, 2009 — the same day ownership was purportedly transferred to Shimoni Resorts Ltd.

But the valid owner of the land, according to official documents, is Sheikh Jabir al-Ahmad al-Jabin al-Sabah of the Kuwait royal family.

Documents in our possession show that Kenya’s Lands ministry subsequently admitted it had no record of any transfer of the land and directed the cancellation of the purported change of ownership.

FRAUDULENT DEAL

On February 28 last year, then Lands Minister James Orengo told Parliament that he had revoked what he termed a fraudulent deal and apologised to the Government of Kuwait. Mr Orengo, now the Siaya Senator, said the contentious land was transferred to Sheikh Jabil in 1962 by Mr Mohammed Yahia Alwarib for Sh125,000.

“There was a transfer which we have since discovered to be fraudulent to Koibarak Trading Company Limited for Sh1 million which was registered on September 23, 2002,” said Mr Orengo, who went on to list details of the other illegal transfers to Miniscule and Shimoni.

“The Government of the State of Kuwait has informed the ministry that it did not participate in any manner whatsoever in the first transfer to Koibarak Trading Company Limited. In this respect and considering the unequivocal statement from the Government of Kuwait, and the fact that there is no copy of such a transfer document in the Ministry of Lands, it is obvious that no such transfer ever took place and the entry to that effect in our records was fraudulent. The ministry will, therefore, not recognise the subsequent two transfers to Miniscule Investment Limited and Shimoni Resorts Limited and the subsequent charge to the African Banking Corporation,” he asserted.

Based on last year’s records, Mr Orengo listed the directors of Koibarak Trading Company as Kelse Mabale, Leonard Kelly Mabale and Humphrey Mgungu Mabaleho — all Kenyans.

Those of Miniscule Investment Limited were listed as Jitendra Prabat and Birage Prabat — both Britons. He gave the directors of Shimoni as Edward Kamau and Njoroge Nani Mungai, both Kenyans.

“The ministry has cancelled all the four fraudulent entries in our records and reinstated the ownership of the parcel of land to Sheikh Jabil Alhamed Aljabir Alsabah. The State of Kuwait is now, therefore, at liberty to transact in the land in accordance with the special conditions contained in the grant,” he directed.

The minister also admitted that the fraudsters had been helped by Lands officials, and said he had forwarded the matter to the Criminal Investigations Department (now Directorate of Criminal Investigations).

It is after this revocation that the well-connected individuals behind the suspected scandal hatched a scheme and rushed to court, where they now claim to be the victims, and are asking for Sh2.3 billion compensation for being dispossessed of their land, leading to “loss of profits for the expected development”.

After filing the suit against the government last year, Shimoni Resorts, listed as the petitioners, are said to have requested an out of court settlement — something the Attorney General agreed to.

The Lands ministry had initially supported the position taken by Mr Orengo in Parliament last year. In a letter dated January 4, 2013 and addressed to the Attorney General, Mr E. Wafula, writing on behalf of the Chief Land Registrar, says:

“In our view, it was necessary to cancel the entries, otherwise the relationship between our country and the State of Kuwait would be badly affected.”

He continues: “The claim that the petitioner has suffered loss in the sum of Kshs2,339,211,790 is ridiculous.”

But in a curious legal opinion dated August 30 this year and addressed to Lands Principal Secretary Mariamu El Maawy, Senior Deputy Solicitor General Muthoni Kimani, on behalf of Attorney General Githu Muigai, warns that the government stands to lose huge amounts of money if the ministry fails to hand the property to Shimoni Resorts.

“The petitioner states that it was never notified of the cancellation, and that it has not received any formal notification to date, and that it has suffered a loss in the sum of Ksh2,339,211,790.00. The sum of Ksh1,600,000.000.00 out of the amount stated as loss above is termed as ‘loss of profits for the expected development’”, the AG states.

OUT OF COURT

The letter advises that the matter be settled out of court as allowing it to reach its legal conclusion would cost the government losses since the cancellation of the transfer did not follow due process. The letter also says the registrar had no powers to cancel the title.

The AG further argues that there has been no proof Shimoni Resorts fraudulently transferred the land. Besides, the letter claims, even if fraud was proved before the cancellation, the company should have been given a chance to defend itself.

“It is, therefore, our recommendations that this matter be settled out of court on the following terms: that we enter into consent on your behalf (Lands ministry) with the petitioner to withdraw the petition with no orders as to costs. That the entries cancelled from the register be reinstated in favour of the petitioner,” the AG advises.

In a subsequent letter responding to the AG’s legal opinion dated September 11, 2013, the Chief Registrar of Lands appears to have changed tune.

“… If that opinion is going to save our ministry from loss through expensive litigation it is advisable that we settle the matter amicably.” This would mean a company cited in Parliament for involvement in fraud could not only be given land belonging to the Kuwaiti kingdom but could also be paid millions of shillings in compensation.

And this is where the differences between Mrs Ngilu and Mr Mabea come out in the open. According to sources in the ministry, Mr Mabea had refused to prepare a document to kick-start the out of court settlement negotiations.

He reportedly stated that the whole deal was fraudulent as the title was acquired illegally by Shimoni Resorts. A vocal political activist associated with Mrs Ngilu is said to be the power behind the deal.

-Nation

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