How evicted firm almost conned State of Sh432m

A group of men carry the gate to Easton Police Station after it was demolished on Wednesday following the State’s repossession of public land in Ruai. [David Njaaga, Standard]

Renton Company, the firm evicted from the sewerage land in Ruai, had attempted to fraudulently sell the 1,600-acre parcel to the government for Sh432 million.

The Standard has obtained documents that provide a rare peak into a deal that would have robbed the country of land and cash.

Deputy President William Ruto’s business associate, Patrick Osero, has since come out to say the DP has a claim on the property.

There is, however, no reference to Dr Ruto, who served as Eldoret North MP in the period of the botched land sale.

As Kenyans were fixated on campaigns leading up to 2002 elections, Renton Company was quietly plotting the multi-million-shilling scam.

The property in question had been allocated under questionable circumstances in 1996, and the faceless beneficiaries were looking to cash out.

Settlement Fund Trustees, an agency within the Ministry of Lands mandated to help squatters own property, had been approached to acquire the vast land.

Already, squatters had moved in and settled on the property, which was mistakenly thought to be part of the Embakasi Ranching Scheme, itself at the centre of numerous ownership battles.

“On the 29th of November 2002, Settlement Fund Trustees entered into an agreement with Renton Company for the sale to the former of the above land,” reads a 2006 letter by the then Lands Permanent Secretary Erastus Mwongera.

In the letter, the PS advised the then Attorney General Amos Wako to institute a legal process to recover a Sh100 million deposit paid four years earlier to Renton Company.

Breach of agreement

Mr Mwongera cited a breach of conditions in the sale agreement, including the delivery of the undisputed property.

“Settlement Fund Trustees later discovered that the land which Renton Company Limited purported to sell to them was actually reserved for sewerage treatment by the City Council,” his letter further reads.

In an interview with The Sunday Standard yesterday, Mwongera confirmed the cancellation of the sale deal, and the circumstances that informed his decision.

He said any property set aside for public use could never be allocated for any other purpose, regardless of who the allocating authority is.

“It is a very elaborate process to reverse any land set aside for public utilities, which would entail major public participation to hand it to a private entity,” said the career civil servant.

After the agreement with the Settlement Fund, Renton Company was paid Sh100 million while the balance of Sh332 million was to be paid upon the handing over of the property.

Evicting the squatters already residing on the land would have been among the things that Renton had to do to ensure the sale conditions were met.

The years that followed witnessed a change of guard in many public offices, a fact that might have complicated prospects for Renton.

Within three years of the sale and with the downpayment paid, the trustees of the Settlement Fund changed their mind about the acquisition of the property.

Renton was required to refund the money, which it claimed it did not have and proposed to stagger the repayments.

On December 8, 2004, Renton, through its lawyers, repaid Sh20 million in the first instalment, while the balance was to be spread over three other instalments.

But Mwongera was growing impatient with the reluctance by the company’s directors to repay the balance of Sh80 million, plus the accrued interest of Sh15.6 million.

AG Wako moved to court on behalf of the Settlement Fund, successfully arguing that the sale was fraudulent and that Renton took advantage of the trustees’ ignorance to sell them land that was meant for a public utility.

“The plaintiff avers that as per the law society conditions of sale and the agreement of sale conditions, the defendant had a duty to disclose to the plaintiff the existence of all rights, privileges, latent easement or other liabilities that affect the suit property,” argued the AG.

Renton Company lost the suit and was directed to repay the balance in full to the Settlement Fund.

To date it is not clear if the money was paid.

That would mark the culmination of the first episode of the long-running drama surrounding the public land that was taken back by the State last week.

It is still too early to tell if the fresh repossession will mark the end of the saga, given the determination of the company to hold on to the property despite all the challenges.

By the time excavators roared to the site, a wall running around the entire 1,600 acres had been erected and a police station with at least 20 officers put up.