Joho loses Sh6 billion city property

A firm linked to Mombasa Governor Ali Hassan Joho’s family has lost a battle for land estimated to be worth about Sh6 billion to businessman Francis Mburu.

This is after an arbitrator ruled that the property, situated in Jamhuri Estate along Ngong Road in Nairobi, legally belongs to Exclusive Estates Limited (EEL), which is associated with Mr Mburu.

The decision was a blow to Aftraco Limited, which was also claiming the land that was initially owned by the defunct Kenya Posts and Telecommunication Corporation (KPTC), now Telkom Kenya.

The 60-acre parcel of land was valued eight years ago at Sh6 billion by Camp Valuers, at Sh100 million per acre.

Although the trader did not purchase the plot, an arbitrator has handed him the land on grounds that a deal he had entered into with a State agency to develop the property about 30 years ago gave him legitimate claim to the land.  

Nairobi lawyer Zehrabum Janmohamed, who was the sole arbitrator, ruled that Mburu is entitled to 60 acres from the 79-acre parcel of land.

The trader has been in the limelight over the controversial sale of the Sh3.2 billion Ruaraka land to the Government, a matter that is the subject of an Ethics and Anti-Corruption Commission investigation, and also embroiled in court cases.

Mburu, alongside James Githaigwa Thirikwa, appeared before the arbitrator as directors of EEL and were represented by lawyer Allen Gichuhi in the proceedings. 

Subsequent agreements

In a decision dated September 6, 2019, Ms Janmohamed declared that the defunct KPTC excised part of its land and transferred it to Postel Housing Cooperative Society Ltd on January 19, 1993 for construction of houses for its workers.

Postel Housing Cooperative Society Ltd then entered into an agreement with Mburu’s EEL on January 28, 1993, which the arbitrator said is legitimate alongside subsequent agreements.

The housing society then later resolved to enter into a deal to build houses on the land with Mburu.

“It’s declared that the Deed of Assignment dated 15th January 2009 between Postel Housing and Exclusive Homes and the decree issued in this regards on 22nd January 2009 are valid and binding on this tribunal,” Janmohamed states.

She then moved to declare the sale agreement between Joho’s firm and Telkom dated July 5, 2011 as null and void.

Mburu listed Telkom and Postel Housing as respondents, while Aftraco is shown as an interested party. Aftraco claimed that it bought the entire 79 acres from Telkom in 2011 for Sh1.52 billion, and paid a deposit of Sh152 million after entering to into a deal.

Court battles

Telkom was represented by the law firm of Hamilton, Harrison and Mathews, while the Joho family firm was represented by lawyer Ahmednasir Abdullahi.

Hamid Salim Sadru, who is also a director in another of Joho family business, Portside Freight Terminal, signed affidavits that were on record before the arbitrator. 

Mburu had moved to court then and managed to stop the transactions, setting off a battle in the corridors of justice.

Janmohamed was appointed as the sole arbitrator through a consent order dated May 11, 2011 by Justice Muga Apondi.

KPTC had entered into a deal with Mburu’s EEL in 1990 for a proposed joint development of 2,430 housing units on plot number 7656, with the defunct KPTC intending to excise the 60 acres for the then Sh1.46 billion housing scheme.

Mburu later wrote to KPTC on September 24, 1990 stating that Shelter Afrique was willing to finance the project up to $60 million, which was 60 per cent of the cost, while KPTC would foot the rest of the cost.

On December 1992, according to the arbitration report, the KPTC board met and resolved to excise the 60 acres and transfer them to Postel Housing at Sh350,000 an acre. KPTC then entered into an agreement with Postel on January 19, 1993 for the purchase of the land at Sh21 million.

However, Postel would later differ with Mburu and halted the development in 1995 after the trader had negotiated for loans to finance the project, leading to the first case lodged at the High Court on May 10, 1995 by Mburu.

In 2011, however, Joho’s family firm entered a deal to buy the entire parcel of land at Sh1.52 billion, insisting during submissions that it was a bona fide purchaser and had already paid Sh152 million.

At one time, then High Court judge Mohammed Warsame ruled to remove a caveat placed by Mburu, paving the way for Telkom to transfer the land to Aftraco.

However, in a majority decision, Court of Appeal judges Sankale ole Kantai and Hannah Okwengu reinstated the ordering barring the sale in March 2016, in a case in which Lady Justice Fatuma Sichale dissented.