Tatu City’s American and international owners have filed a lawsuit against former Central Bank governor Nahashon Nyagah, naming him at the centre of a Sh9 billion fraud involving land associated with Tatu City.
The allegations are contained in a court filing demonstrating that Nyagah illegally transferred land owned by an American-led group of investors to his sister-in-law, cousin, cook’s daughter and members of his church congregation.
The civil suit, which has serious criminal implications for Nyagah, was filed in the High Court on behalf of Kofinaf and Galba Mining Ltd., whose beneficiaries include Stephen Jennings and other international investors behind Tatu City.
The land referred to in the lawsuit neighbours Tatu City and is part of the wider Kofinaf coffee estate.
The suit alleges that Nyagah, who resigned amid scandal as Central Bank governor in 2003, is the “controlling mind and will” of an “intricate scheme” to shift land ownership to relatives and friends, in collusion with Nairobi lawyer Nelson Havi of Havi & Co. Advocates.
In one example, a controlling share stake in the Special Purpose Vehicle (SPV) Purple Saturn holding a 500-hectare land parcel worth in excess of Ksh4.5billion has been allotted without authority to a company incorporated at the offices of Nyagah’s sister’s law firm.
However, the land was purchased by Jennings and investors from the original Belgian owners of Kofinaf in 2010, and the entity should be beneficially held in its entirety by them.
The suit, which in total involves over 900 hectares of land, further says Nyagah is the ultimate beneficiary of the alleged theft due to his close personal connections to the recipients of shares in the scheme, who include:
– Jane Wambui Gacoka, Nyagah’s sister-in-law
– Judy Wanjiku Ngugi, who works for Nyagah’s sister Rachel Murugi Mugo in her law firm in Embu, which is Nahashon Nyagah’s home village
– Jeremy Nyaga Njeru, Nahashon Nyagah’s cousin
– Nalia Nengodo Ibrahim, the daughter of Nahashon Nyagah’s long-time cook, Ibrahim Mwatata
– Samuel Ojoro Malaki, a member of New Covenant Church congregation, of which Nahashon Nyagah is Chairman of the Board
– Jared Omondi Obor, a member of the New Covenant Church congregation, of which Nahashon Nyagah is the Chairman of the Board
– Zuhrah Atieno Awendo, a member of the New Covenant Church congregation, of which Nahashon Nyagah is Chairman of the Board
The plaintiffs argue that they are the victims of fraud that aims to steal the land and prevent the construction of Tatu City, which will be home to 70,000 residents and 30,000 day visitors, and create tens of thousands of jobs.
The beneficiary owners of the land also demonstrate that titles have gone missing at the Lands Registry with Nyagah’s and Havi’s involvement, and company ownership and board composition files have been altered at the Companies Registry.
On 13 May, in response to the plaint, the High Court ordered injunctions on all company directors and the individuals listed as defendants, as well as activity in the Companies Registry.
Information on the alleged theft has been turned over to the police for investigation, which could lead to criminal charges filed against Nyagah. In 2003, Nyagah was forced to resign as Central Bank governor following the collapse of Euro Bank, and with it pensions savings for thousands of Kenyan workers.
Shah and Nyagah have been board directors of Tatu City since 2010, when they received a $500,000 finder’s fee for brokering the purchase of Tatu and Kofinaf estates by investor Jennings and his partners.
Shah, Nyagah and Steve Mwagiru are said to own their Tatu City shares in a series of opaque Mauritius structures. Legal disputes in off-shore jurisdictions between the Kenyans have led to the dilution of the shareholding of Nyagah, who lost a court case against Mwagiru in Mauritius on May 6.
Meantime, the project owners have pledge to continue to invest in Tatu City, though they say the time and resources spent fighting legal action could delay infrastructure delivery.
In April, coffee conglomerate Dormans announced it will build its global headquarters at Tatu City, employing 200 people.