Tracing Kenneth Matiba's nasty battle with banks

Kenneth Matiba  (Left)

In Summary

• Matiba is owner of conglomerates ranging from Hillcrest Schools, to Jadini, Safari Beach and the Naro Moru River Lodge
• The story of Matiba, however, cannot be told without bundling it up with his fight for multi-party democracy in Kenya.

NAIROBI, KENYA: His financial woes were fully manifested when creditors raided him on the beach.

But for a man who spent years in the trenches fighting authoritarianism, this was an affront not to be taken lightly, however justified it was.

Personally, he chased away the four receivers sent by

His financial woes were fully manifested when creditors raided him on the beach.

But for a man who spent years in the trenches fighting authoritarianism, this was an affront not to be taken lightly, however justified it was.

Personally, he chased away the four receivers sent by Barclays Bank of Kenya to take over his hotels on the Kenyan coastline over a debt of almost Sh1 billion.

This was classic Kenneth Matiba – combative and eccentric. He had once dared Mwai Kibaki to a boxing match and threatened to expel Asians when he became president.

The receivers from PriceWaterhouseCoopers had come to take over the Alliance Group of Hotels in Mombasa’s South Coast namely Jadini, and Safari beach as well as the Naro Moru River Lodge in Naro Moru, near Nanyuki town.

Police Commissioner

This was in June 2000. Despite his defiance, the High Court later that month ordered the Police Commissioner Philemon Abong’o to ensure that Matiba was thrown out of his hotels and the receivers take up full control of the Alliance Group of Hotels.

This was after his son Raymond, daughter Susan and a director of Alliance Group David Kabeberi failed to turn up in court to defend a Sh1 billion suit against the group.

As reported in the East African Standard, the court clerk called out the Sh1 billion case file loudly for two times between 9 and 9.30am for the sake of the Matiba’s but neither kin nor representative was anywhere near the court room to respond. The Judge then set aside case to 10:45 to allow them or a representative to appear. At 10:46 the court clerk called out the case file two times but no one appeared. “Subsequently, the judge directed Barclays Bank to proceed exparte with the application against the foursome,” wrote the paper.

Barclays Bank lawyer Daniel McVicker told the court of the difficulties experienced in serving the suit papers. His process server, John Kambo had a “rough time” when he went to serve Matiba at the Jadini Beach Hotel.

Guards were everywhere making it difficult to reach Matiba, who was the chairman and director of Alliance Development Ltd and Alliance Group of Hotels while his son and daughter are directors in the two companies.

The judge directed that the same directors and all senior managers of Alliance Development Ltd and Alliance Group Hotels Ltd (in receivership) to hand over all books of accounts, records, documents and other movable assets of the companies to Barclays Bank’s appointed receivers and managers.

Justice Onyango Otieno further instructed that the four directors not interfere with the business and management of the two companies and receivers be granted access to all the immovable properties of the two companies. Justice Otieno retired in 2014 after serving 48 years in the judiciary. After the drama with the receivers, Matiba lamented that on many occasions, he had told banks, particularly Barclays that their charges and operations were counter-productive to the economy, especially to locals.

He went on saying that Europeans had mistreated Africans for too long in their own country.

“Kenya’s problems would only be solved when large banks, businesses and property belong to Kenyans of whatever colour who will be buried in the country,” reported The East African Standard (now The Standard).

The paper reported that the Alliance Group of hotels owed Barclays Bank of Kenya over Sh700 million, a debt that arose from an original loan of Sh300 million.

The debt had shot up due to the high interest rates in the country and also a tourism slump that had hugely affected coast hotels.

The group is said to have faced losses of Sh700 million over the past three years owing to the low occupancy rate at the hotel. Safari Beach Hotel, opened by President Moi in 1986, is said to have cost Sh150 million.

At its halcyon days during the tourism boom of the late 70s and 80s, the Alliance Group employed over 1000 workers in its hotels.

His son Raymond Matiba, a director in the company, sought to clarify that the receivership did not affect other company operations such as schools, media and agriculture.

This however did not last, when in 2004 Barclays sent receivers to take over the Hillcrest Group of Schools over a Sh540 million debt.

The appointed receiver was DCDM Consulting which said that the receivership was not linked to the previous takeover of Alliance Group of Hotels. Located in Karen, the schools target the rich and offer the British Curriculum. They were finally sold in 2011.

The story of Matiba, however, cannot be told without bundling it up with his fight for multi-party democracy in Kenya.

He was detained in 1990, a horrifying one-year experience that saw him only released after he had suffered a stroke that has affected him up to this day.

He came out of detention in 1991 then went to seek for treatment in London returning in 1992 to contest for presidency in a highly controversial election.

He was also the founder member of the Forum for Restoration of Democracy (FORD) and later chairman of its faction FORD Asili and later founded the Sabasaba Party.

Collapsed businesses

Last week, the High Court ordered that Matiba be paid Sh504 million as compensation for torture. From the package, Sh471 million was compensation for his collapsed businesses with the court observing that his business empire failed because of government interference and poor health.

His health deterioration is attributed to the decline of his businesses. His media company, Kalamka Ltd, which owned The People Daily was sold to Mediamax Ltd  linked to the Kenyatta family. He also lost a controlling stake at Carbacid, a carbon dioxide manufacturer, after selling shares worth over Sh400 million.

But is the compensation a little too low for a man who in the late 1990s reportedly paid a British public relations firm representing his interests in London Sh14 million annually?

As the High Court said: “Nothing can return to the business mogul what he was once, a man who towered over the political and financial landscape of Kenya like a colossus.”

It is reported that Jadini Beach Hotel was sold for Sh900 million to Simba Lodges in an auction by Barclays to recover the bad debts. The only hotel now being managed by the Matiba family is the Safari Beach Hotel.