Genesis of Jirongo's financial woes - Daily Nation

Tracing genesis of Jirongo's financial troubles

Sunday April 8 2018

bankruptcy

Former Lugari MP Cyrus Jirongo. The flamboyant politician was declared bankrupt because of a debt of Sh700 million he owed a long-time friend-turned-foe, Sammy Boit Kogo, in October 2017. PHOTO | FILE | NATION MEDIA GROUP  

By KIPCHUMBA SOME
More by this Author

The complexity of Mr Cyrus Jirongo’s deal with the Emirati investors to construct high-end houses in Ruai pretty much sums up the extent of the former MP’s financial misfortunes

Mr Jirongo is a man with properties worth billions of shillings but woefully short of cash: a broke billionaire, unable to pay his creditors, be they banks or his friends.

“He has properties worth billions but his liabilities running into billions as well, and therein lies the problem,” said a source with close knowledge of Mr Jirongo’s financial troubles, but who asked not to be named since he is acting for him in another deal.

PRESIDENTIAL ELECTION

In February this year, the Central Bank sold Mr Jirongo’s 103-acre farm in Uasin Gishu for Sh53 million in a bid to recover loans owed to the collapsed Dubai Bank. Through his three companies, Mr Jirongo owed Dubai Bank Sh495 million at the time of its collapse in August 2015.

In October last year, the High Court declared Mr Jirongo bankrupt after he failed to pay a loan of Sh700 million he borrowed through his friend and longtime friend Sammy Boit Kogo.

Mr Jirongo had secured Sh700 million from the National Bank of Kenya (NBK) using properties registered under the names of eight of Mr Kogo’s companies.

He, however, failed to repay the loan and the bank sold the properties on May 22, 2009 through a public auction.  Mr Jirongo appealed the High Court’s bankruptcy declaration to enable him to run in the October 26, 2017 repeat presidential election.

FLASHY LIFESTYLE

Mr Jirongo and Mr Kogo were founders of the infamous Youth for Kanu 1992 group, popularly known as YK‘92, a youth lobby group formed to campaign for President Daniel  Moi in that year’s elections.

YK‘92 members are best remembered for their flashy lifestyles which is suspected to have been funded by money looted from state coffers. Over time, the group became a by-word for corruption.

In 2016 Mr Kogo went to court in an attempt to recover a piece of land in Upper Hill, Nairobi, from Mr Jirongo. The latter said he bought the land by acquiring a firm — Soy Developers Limited — from Kogo in 1991.

He claimed in court that Mr Kogo had admitted to being a proxy for Mr Jonathan Moi, a son of former President Daniel arap Moi, who was the actual owner of Soy Developers Limited.  

APPEAREDMALICIOUS

 Mr Jirongo said he gave Sh7 million to Mr Moi before using the Upper Hill land to secure a Sh50 million loan from Postbank Credit Limited.

Mr Boit and Mr Moi denied claims that the former president’s son received money from Mr Jirongo or that he is linked to Soy Developers Limited.

The Directorate of Criminal Investigation recommended his prosecution for allegedly forging the land’s documents. However, in January last year, the High Court stopped the prosecution saying the suit, coming 24 years later, appeared malicious. But the court declined to determine whether Mr Jirongo was guilty or innocent in the matter.

Heavily in debt, friends appear to have deserted Mr Jirongo, a fact that he  publicly admitted when he spoke two weeks ago at a funeral in Karachuonyo, Homa Bay County.

During the event, which was attended by former Prime Minister Raila Odinga, he claimed that President Uhuru Kenyatta and his deputy William Ruto had abandoned him.

JOHN MAGUFULI

“I shall continue being close to the Luo community because even the other day, I visited Raila and told him how the top Jubilee leadership had abandoned me,” said Mr Jirongo.

He added that Mr Odinga had come to his aid by introducing him to Tanzanian President John Magufuli and Premier Kassim Majaliwa who gave him a “job”. He did not reveal the nature of the job.

Although Mr Jirongo complained of being sidelined by Jubilee, it is Deputy President Ruto, another former member of YK ’92, with whom they have had the most bitter of fights in recent times.

In May 2016, Mr Jirongo sensationally linked the DP to the death of outspoken government critic Jacob Juma who was murdered by unknown people. Mr Jirongo and the DP were once close friends, political associates and business partners before they fell out supposedly due to business rivalry.

50 DAYS

The DP, who acknowledges that he was once Mr Jirongo’s mtu wa mkono (handyman), says that his friend-turned-foe is jealous and bitter of his (Mr Ruto’s) political and business success.

“I acknowledge I was his junior, but why is he so chronically bitter at me?” said the DP during the funeral of former Malava MP Soita Shitanda in June 2016. “I have told him quite often, it is all about ‘kujipanga’ (strategy).”

In January, last year, Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli sued Mr Jirongo over a Sh110 million debt.

The trade unionist claimed that under an agreement made in August 10, 2016, he advanced Sh100 million to Mr Jirongo, payable in 50 days, with an interest of Sh10 million.

AGREEMENT

The former Lugari MP allegedly made an undertaking on October 10 admitting his indebtedness to Mr Atwoli and undertook to repay him by October 21.

“Despite demand made, Mr Jirongo has totally refused, failed and ignored to effect payment as per the terms of the agreement,” said Mr Atwoli in court papers.

The turn of events marked a dramatic fall of one of Kenya’s most colourful businessmen. By the time he shot into the national limelight aged 32 as the chairman of YK ‘92, Mr Jirongo had made a name as a successful real estate developer in Nairobi. He often brags that he was a billionaire by the age of 30.

When the Sh500 note was first released in the early 1990s by the Central Bank, it was nicknamed ‘Jirongo’ because the note was widely dished out in the public by his YK’92 outfit during the 1992 campaigns.

Ironically, the genesis of his current financial predicaments can be traced to his involvement in the group. A few months after winning the 1992 general election, President Moi disbanded the group, calling its members a bunch of “con men.”

25 YEARS

Mr Moi moved in to financially cripple its ambitious chairman who, by his own admission, harboured ambitions to build the group into a formidable political outfit to rival the then ruling Kanu party.

In May 1993, the National Social Security Fund (NSSF) was ordered to cancel the purchase of 500 housing units worth Sh1.2 billion at Hazina Estate from Jirongo’s company, Sololo Outlets.

In quick succession, Sololo Outlets was declared bankrupt and lawyer Mutula Kilonzo appointed the receiver. All this was exposed as government plan to hamstring Mr Jirongo financially after top secret documents on the deal surfaced in 2012.

In the same year, Jirongo was paid Sh 490 million by NSSF in an out of court settlement for the houses. But it is evident from his current financial crisis that Mr Jirongo is far from recovering from this initial setback 25 years ago.

**

Editor's Note: This story has been updated to correct that Mr Jirongo was unable to pay his creditors, not his "debtors". 

Advertisement