The disappearance into thin air of property development firm Simple Homes is turning out to be a modern-day mega pyramid scheme in which thousands of Kenyans have lost hundreds of millions of shillings.
Sunday, The Standard on Sunday can reveal the identities of the individuals who orchestrated this scheme and how gullible Kenyans were lured into doing ‘business’ with Simple Homes. From interviews with multiple sources, it emerged that victims of the scam lost at least Sh500 million to the con artists.
The company marketed itself as a Special Purpose Vehicle (SPV), which purported to aid Kenyans purchase homes using a ‘pay rent, own home’ model but suddenly closed shop and erased its Internet footprint, leaving those who had invested their money bewildered.
By Saturday, police were yet to visit the company office on the first floor of Centenary House along Ring Road in Westlands, Nairobi. However, victims of the con game maintained they had made official complaints at Kileleshwa Police Station.
The firm’s office still remains locked. Workers at the building say the occupants did not say they were vacating the building and were yet to come pick their belongings.
“Hundreds of people have been coming here asking for them (Simple Homes). They haven’t communicated that they left,” a staff member told The Standard on Sunday. Interestingly, Kileleshwa Administration Police Camp is just across the road from Centenary House, raising questions about inaction by the government.
Kilimani OCPD Peter Katam told The Standard on Sunday that he could not look into the matter. “I am away in Mombasa attending some workshop for the last one week so maybe you should ask Kileleshwa Police Post,” he said.
On the run is Susan Langat, the company’s general manager, Walter Muigai, Harriet Kenyatta and Rehema Wanjiku, who were marketing the company’s fictitious projects, and Director for Sales, Marketing and Advertising Dalida Shah.
At the centre of the scam is Lilian Wangui Rukwaro, known to the public as Kui Rukwaro or Lee Rukwaro, a model and former Miss Tourism Murang’a County 2013. A Bachelor of Economics Graduate from Kenyatta University, she had consistently referred to herself in the media as the founder of the company.
Interestingly her name does not appear among the 13 shareholders of the company which we have obtained. This is despite the fact that she has been referring to herself as the founder, raising suspicion that she may have been a proxy for a complex criminal ring targeting gullible home purchasers. Investigations show the scheme was a well-laid plot to rip off unsuspecting Kenyans by pretending to be in a position to offer them what almost everyone dreams of owning at an affordable price. A house.
And by using youthful personalities to be the face of the idea was to give an image of a youthful successful company whose psychological effect would draw investors. In one of her many interviews ran by the media, Rukwaro said she convinced an investor to provide Sh500,000 as seed capital and she made Sh7 million from her first social media campaign.
“The problem in the property sector in Kenya, whether it is development or home buying, revolves around finance. The structure of finance dominated by the banks does not favour anybody other than the banks,” she said.
In order to own a house, prospective buyers were supposed to register using Sh2,500 then save 25 per cent of the value of the property they wanted to buy upfront. They would then be allowed to book for a unit which they would occupy once a particular project is complete. To own a three-bedroom house in one of the projects they were allegedly constructing in Wambalee Court Apartments in Embakasi, for example, a prospective buyer was to pay Sh300,000 (five per cent) to book and a further Sh1.2 million (20 per cent) in order to move in when complete.
The rest was to be paid at the rate of the rent charged per month for the unit for a period spreading 10 years. Compared to a mortgage, it was a cheap yet effective bait and phase one of the project was to be completed in December last year.
However as it turns out, the photos used for the project were lifted from De Velde Estate in South Africa. All of their advertised projects had a similar characteristic.
A victim who only wished to be identified as Vijay says it was impossible to notice anything wrong with the projects unless you were keen. Like most victims, he knew of the scheme through social media and when he approached his mother with the idea, she was sceptical at first but was later convinced by the executives at Simple Homes.
“My mum told me she wants to do something for me, because she is aging and my parents are separated. She said she wanted to help me get a house so that I have a head start in life,” he said.
Before signing up, they took the documents to a lawyer who gave them the green light but after making the first payment, things started going wrong.
“The location they gave us first was wrong. They told us the houses are being constructed on Beijing Road in Mlolongo. I went there with my friends and there was nothing,” he recalled.
“We asked them, where exactly were the buildings? They told us that they cannot disclose right now until we made a deposit. We made a site visit application and emailed it to a Muigai,” he said. In total, Vijay and his mother lost Sh255,000. Out of this, Sh2,500 was for registration and Sh55,000 for joining the Sacco. Another victim identified as Rebecca lost Sh177,000 for a house in a development known as Juja Plimau Ndogo.
The company was not registered as a Sacco at the Registrar of Companies but as a Development Consortium under registration number CPR 2016/221004. Its Nairobi County business permit number 2016/1403351, however, says it is a cooperative society. This further confuses whoever dealt with the firm.
But to further enhance its credibility in the eyes of the public, the firm also began selling projects belonging to other companies as an imposter. One of the developments that was affected is a multi-billion shilling housing project in Juja South.
“You know there are so many agents that come to us saying they can sell our houses. Simple Homes wrote to us some time last year but they could not answer most of the questions we asked them so we declined,” Patricia Githu, the Chief Executive of Developing Africa Limited, told The Standard on Sunday.
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“Then we received communication from our site manager mid-June last year that one customer had visited requesting to book a unit as he had already paid Sh600,000 through them. We wrote to Simple Homes seeking explanation and that was the last time we heard from them,” she said. At around the same time, Apex Advancement put out an announcement saying it was no longer in any engagement with Simple Homes. It warned people not to pay money to Simple Homes for a number of properties, including Juja South and La Casa Luxury apartments.
“It has been brought to our attention that monies have been paid by purchasers in relation to the above developments. Such monies have not been received by the developers and therefore no units have been booked in connection with any sums paid to Simple Homes,” it said on its Facebook page on August 23.
“Developers will therefore not be liable for any purported transactions entered into by simple homes in respect to any of the above developments,” it added. Githu says they have never dealt with Simple Homes and she does not know them.
Interestingly Apex Advancement Kenya Limited is the largest shareholder of Simple Homes with 300 shares. Karen Wanjiku, Linda Nerea, Joan Akinyi, Charles Ochieng, Caroline Atieno, Miriam Njoki, and Licorne Kenya Limited are listed as minor shareholders in the company, with between one and seven shares each. Then Morris Mwangi, Janet Kanini, Apex Advancement Kenya Limited, Joyce Manyasi, George Gathogo and Nancy Wathoya Kanyago are the principle shareholders.
And Simple Homes website, which was deactivated two weeks ago but which The Standard on Sunday has been able to extract using Internet Archive Wayback technology, indicates that Joyce Manyasi Matu, Kui Rukwaro, Dalida Shah and Ken Mutuma are mentioned as directors.
Ken Mutuma, who we believe is one of the brains behind the scheme, is also one of the directors of Apex Advancement Kenya Limited which is the biggest shareholder of Simple Homes with 300 shares. Also listed as the company’s directors on its website are Dorris Wyne and Eunice Mpenda.
Apex Advancement is located in Studio House, Argwings Khodhek Road in Nairobi where we have established Mutuma also runs a law firm; Kihara & Wyne Advocates.
One of the projects that Simple Homes was trying to sell to clients was Apex Court which they claimed is on LR 15459-62 in Kajiado Kaputei. Apex Advancement also says it is developing the same property which it claims is in Kitengela.
A dispute over proceeds made from this ‘project’ is now subject to a court case between the two companies. Court papers which we have seen give us a glimpse for the first time over how much money the Simple Homes scheme might have made from a single ‘fictitious’ project from the dozens they have done.
“Persuant to a report dated April 20, 2016, the first defendant stated that the development had received tremendous and positive response with the development being overbooked by 274 individuals who had sought home purchase plans translating to Sh44,300,000 in investment based on the construction units model outlined in the agreement,” says the suit.
In the suit, Apex Advancement wants Simple Homes Development Consortium and Lilian Wangui Rukwaro “stopped from collecting money on behalf of the plaintiff.”
Also attached in the suit is NIC Bank which Simple Homes banks with. NIC Bank through their communication handlers, Redhouse Public Relations, Saturday refused to comment on the matter.
“They say they cannot comment on confidential client matters.” The Standard on Sunday made efforts to call Rukwaro and Langat for comment but they could not be reached by the time of going to press.