10 year land case that had Kibaki take the stand

Former President Mwai Kibaki and seven other directors have regains control of a multi-million property and company they started in 1970s. [Photo by Kibata Kihu/Standard]

For 10 years, retired president Mwai Kibaki battled for control of a piece of land in Nyeri town.

Kibaki, together with his elder brother, Samuel Githinji, and friends, Kimwatu Kanyungu, Kiiru Gachuiga, Gadson Gitonga, and Kibera Gatu, acquired the quarter-acre in the 1970s.

The group also founded Mathingira Wholesalers Limited. Gachuiga, Gitonga, and Gatu have since died.

The land, along the Nairobi-Nyeri highway, is worth Sh20 million and has a commercial building on it. The building hosts several businesses.

The battle for control of the land saw the former president take the witness stand to convince the Environment and Land Court that he is among the owners of the property. He termed another group that had laid claim to the land ‘strangers’.

Protect stake

In 2013, soon after retiring from the presidency, Kibaki applied to be enjoined in the case, where he sought to protect his stake in Mathingira Wholesalers Limited.

Kibaki had not involved himself in the day-to-day running of the business and told the judge as much when he appeared in court.

He told High Court judge Anthony Ombwayo he was unhappy the case had dragged on for many years. Kibaki said it would have been better for the parties to settle the dispute out of court.

“I would not have wished it to get this far because we know each other from the time we founded the company,” Kibaki said in his testimony on November 15, 2013.

Trouble started when a group of new shareholders decided to take over the management of Mathingira Wholesalers Limited. They became part of the company after the original shareholders - Gitonga, Gatu, and Githinji - sold them their shares.

On October 13, 2007, the new shareholders - Francis Gathungwa, Peter Munuhe, Sammy Kiiru, and Peter Gichuhi - met and passed resolutions to take over the management of the company from Mr Kanyungu. They consequently elected Gathungwa as his replacement.

After his removal, Kanyungu allegedly withdrew Sh75, 824 from the company’s bank account and collected Sh28, 000 from a tenant.

A rift emerged and some stakeholders went to court seeking to take over the company’s property.

In his testimony, Kibaki said there was no notice before the original members transferred their shares to new members.

In her judgement on October 12, 2016, Lady Justice Lucy Waithaka declared both Kibaki’s team and the newly incorporated members as legal directors of the company. She also ordered the company to elect new board officials.

Kibaki and Kanyungu went to the Court of Appeal, seeking a declaration that Ndiritu Munuhe, Sammy Kiiru, and James Kanyi were not owners of the company.

Kibaki and his team further said since the company did not own the disputed land, the defendants had no right to the property and the building despite the fact they had acquired shares.

On Wednesday last week, justices Fatuma Sichale and J. Kantai granted Kibaki and Kanyungu back control over the land.

The judges ruled that the new shareholders had disregarded the memorandum and articles of association when they acquired the shares. The court also ruled that the land was unrelated to the corporate body.

Totally unrelated

“She (Justice Waithaka) mixed-up shareholding of a company with an asset which was totally unrelated to a corporate body,” the judges said.

The respondents said ownership of the land had changed from the original proprietors to the company when it was incorporated in 1983.

They said they believed by purchasing shares, they automatically became owners of the suit land which, to them, was the company’s asset.

The only income Mathingira earns from the building is rent, which according to court papers, has decreased significantly over the years, from Sh900, 000 a month to Sh500, 000 currently.

Tenants said they had an interest in the case but did not seek to be enjoined.

However, they renewed their interest when the matter landed in the Court of Appeal, after reports they would be evicted. But one of the tenants said he did not expect the businesses to be affected by the case or judgement.

“The case has not affected us. At the beginning of the year, there were reports some of us would be evicted but we have been assured our businesses are safe,” said a manager in one of the businesses.