NLC on the spot over Sh1.5 billion pay to suspicious firm

National Land Commission chairman Muhammad Swazuri addresses the press in Eldoret on February 20, 2018. EACC has launched investigations into the suspicious acquisition of school land in Ruaraka, Nairobi. PHOTO | JARED NYATAYA | NATION MEDIA GROUP

What you need to know:

  • Amount paid to a company claiming ownership of two public schools.
  • Sh1.5 billion withdrawn 30 minutes after being wired into account.

The Ethics and Anti-Corruption Commission has stopped the payment of Sh3.3 billion to a shadowy company and launched investigations into suspected irregular compensation for a prime land near the General Service Unit headquarters.

Part of the Sh3.3 billion was paid to the owner of LR No 7879/4 as compensation for land on which Ruaraka High School and Drive Inn Primary School occupy.

The Ministry of Education had secured the land through forced acquisition.

The Sunday Nation has seen two letters from the EACC directing the National Land Commission to stop any further payments to Whispering Palms Estate Ltd pending the completion of investigations.

SHED LIGHT

“The commission is investigating allegations of irregular compensation for Ruaraka High School and Drive Inn Primary School upon LR. No.7879/4 (part) in Nairobi County,” EACC tells the land agency in the first letter signed by Director of Investigations Abdi Mohamud.
“We note that the payment of Sh1.5 billion to Whispering Palms Estate Ltd on January 30 on behalf of Afrison Export Import Ltd and Huelands Ltd was a part payment. As we continue with the investigations, we wish to advise your commission not to make further payments until the investigations are completed.”

In a follow-up letter, the anti-corruption agency directs NLC officials to appear before EACC detectives to shed light on the compensation.  
INTERVIEW

“EACC is investigating allegations of irregular compensation for Ruaraka High School and Drive Inn Primary School,” reads the February 2 letter which is signed by the EACC deputy head of investigations, Humphrey Mahiva.

It is addressed to NLC chief executive Tom Chavangi.

“In order to facilitate the investigations, the commission intends to interview and record your statement on February 5 on the Sh1.5 billion to Whispering Palms Estate Ltd. You are required to appear before the commission with the original documents of the payment voucher and the supporting documents, swift transfer documents/advice, letters appointing delegated AIE holders and any other relevant to the payments.”

INVESTMENTS

The Sh1.5 billion paid out to Whispering Palms Estate Ltd on January 30 is part of the Sh3.3 billion the government had set out to buy the land on which the two public schools occupy but which until then was deemed to have been private property.

In a March 11, 2017 letter, Education Cabinet Secretary Fred Matiang’i directed NLC to initiate the process leading to the acquisition of the land so as ensure the two schools got title deeds.

NLC chairman Muhammad Swazuri wrote back to Dr Matiang’i on April 24, 2017 noting the ministry’s interest to “secure the public investments in the two schools”.

VALUATION

EACC investigators swung into action when NLC effected the payment to Whispering Palms Estate Ltd even though the company neither owned the land nor was it part of the agreement filed before it in the claim.

The document further raises questions on whether NLC conducted its valuation of the property or merely relied the "owners", which placed the total land mass at 13.5 acres.

Independent valuation of the property showed it was slightly more than 9.6 acres.

ACCOUNT

Sources within the EACC told the Sunday Nation investigations centre around the movement of the Sh1.5 billion payment once it was credited to the Whispering Palms Estate Ltd account.

According to EACC sleuths, the amount was withdrawn barely 30 minutes after it was wired to the account, attracting the curiosity from the Financial Advisory Centre at the Central Bank of Kenya, which hastily moved to court and obtained an order freezing nearly 20 different accounts on which the money was transferred to.

STATEMENT

Sources told the Sunday Nation that Mr Chavangi appeared at the EACC headquarters on February 5 and recorded a statement on the payments.

Others who have been questioned are Dr Swazuri, his deputy Abigail Mbagaya, the Director of Valuation and Taxation Salome Munubi, Dr Tom Kanyimbih who is the commissioner in-charge of the Committee on Acquisition and Compensation, Commissioner Emma Njogu, Mr Joash Oindo, the Deputy Director of Valuation and Taxation and the Financial Director Francis Karimi Mugo.

APPROVED

Minutes of the commission’s Land Acquisition and Compensation Committee, show that the Sh1.5 billion was approved in respect of Afrison Export Import Ltd and Huelands Ltd during the meeting on January 25.

“Payment of Sh1.5 billion to Afrison Export Import was approved. Registered owner to sign an indemnity confirming that all facts and documents of ownership provided are authentic,” the minutes say.

Records seen by Sunday Nation show that the indemnity for the land was signed on February 5 by Mr Mark Mungai Mburu, the acting as director for Afrison Export Import Ltd and Huelands Ltd.

CLAIMANTS

A week earlier, on January 26, NLC through Dr Munubi had issued the certificate of award to Afrison Export Import Ltd and Huelands Ltd, which documents as the claimants, but with a caveat that payments could only be released after the directors signed the indemnity clause and electronic funds transfer forms.

On the same day, the directors of the two companies accepted the award of Sh1.5 billion being payment of the Sh3.3 billion, the total cost of the land.

It was the same Mr Mburu who signed the statement of acknowledgement as the claimant.

However, it is at this point that things get murky.

CHANGE

First, even though they accepted the payment, the directors of Afrison Export Import Ltd wrote to NLC on the same day, January 26, informing it of the change of details of the account through which the payments were to be made.

Mr Justin Mburu, acting as director for Afrison Export Import Ltd and Mr Mark Mburu, acting as director of Huelands Ltd wrote to the NLC informing it of change of the details of the account.

“The account details we want the total amount paid to is in the name of Whispering Palms Estate Ltd, account number 061 1033613, Barclays Bank, Westgate Branch," he wrote.

SHARES

NLC accepted the request even though Mr Mark Mburu was not listed as a director of Huelands Ltd.

Records at the Registrar of Companies show that the directors of Huelands Ltd are Francis Mburu and Geoffrey Mutisya, both whom hold a share each, with Drive Inn Estate Developers Ltd owning 998 shares of the company’s 1,000 ordinary shares.

The directors of Afrison Export Import Ltd are listed as Francis Mburu, with a half of the company’s shares, Mark Mungai Mburu owns 25 shares, while Justin Mungai Mburu has 25 shares of the company’s 100 ordinary shares.