The fortunes of construction tycoon James Mugoya will dip further as a law firm prepares to wind up his company over a legal debt linked to a multi-million shilling settlement with the National Social Security Fund (NSSF).
Gichuki Kingâ€™ara & Company Advocates has placed a winding up notice in the Kenya Gazette that will lead to sale of the firmâ€™s assets to pay off creditors and then dissolve the business.
The law firm, which acted for the construction company in a Sh342 million suit against the NSSF, is pursuing Sh29.4 million in legal fees even as Mugoya Construction Company relocates to Uganda, the home country of its majority shareholder and managing director, Mr Mugoya.
The winding-up petition is another blemish to the construction company, which in the former president Daniel arap Moiâ€™s reign emerged among a group of politically well-connected contractors that made money from government contracts.
â€œNotice is given that a petition for the winding-up of Mugoya Construction and Engineering Company Limited by the High Court,â€ read the notice.
â€œThe said the petition is directed to be heard before the court sitting at Milimani â€¦ and any creditor or contributory of the said company desirous to support or oppose the making of an order on the said petition may appear at the time of hearing in person or by his advocate.â€ Gichuki Kingâ€™ara & Company moved to the High Court last year claiming that the construction firm had declined to pay for legal services rendered.
The law firm froze the companyâ€™s accounts in Middle East Bank, Stanbic Bank, KCB, Transnational Bank, Citi Bank and Habib Bankâ€”which were said to hold Sh324 million that the NSSF paid the construction firm.
The court was told that equipment and assets could not be located and that some of them were being transferred to Uganda. Since the exit of President Moi, Mr Mugoya has been in the news for the wrong reasons.
Mr Mugoya, 63, studied engineering where he is rumoured to have struck a friendship with Mr Moiâ€™s son. This ushered him into the corridors of power, yielding a business partnership that made him a beneficiary of coveted projects like NSSFâ€™s Embakasi Housing in 1993.
Things changed for Mr Mugoya after the 2002 when two road contracts he had been awarded were cancelled by the Narc government. The Sh324 million NSSF out-of- court settlement, which provoked public fury, has its roots in a 1995 failed housing project in Karen.
The project hit a snag after the City Council of Nairobi refused to grant approval for the drawings, arguing that the type of development was not permitted in the exclusive Karen area.
Consequently, NSSF asked Mugoya not to do any work until all approvals had been granted.
Ten years later, long after the project had been cancelled, he hit the NSSF with a Sh633 million claim. The matter dragged on in court for years before he was paid Sh342million.