How firm dispossessed State agency of land worth Sh1.6b
The trail of how a Government agency lost prime land in Upper Hill, Nairobi, to a private developer can now be traced.
The National Land Commission (NLC) in 2016 made a controversial ruling granting the 0.63 hectares parcel that had since 1989 been reserved for the National Council for Population Development (NCPD) to a private developer, even after acknowledging that the same had come in to their possession irregularly.
The Public Investment Committee (PIC) was told that though investigations by the Ndung’u Land Commission into the ownership of the land had ruled in the favour of NCPD, the commission ignored a directive to revert the land to the rightful owners.
Instead, the Mohamed Swazuri-led Commission ordered that the title be re-issued in the name of the developer, Rosestar Properties Limited, allegedly on grounds of “public interest.”
Appearing before PIC on Thursday, NCPD Director General, Josephene Mbaya recounted how the prime land, estimated to be worth Sh1.6 billion slipped through their fingers.
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The land, LR No 209/13332- Plan Nu 93637/11/724, is next to Kenya Prisons Headquarters, on Ngong Road, near the National Social Security Fund complex. Documents presented by NCPD to the committee chaired by Mvita MP Abdulswamad Nassir show that the land was reserved for the council for construction of the headquarters through a letter dated June 22, 1989 by the Commissioner of Lands.
Rosestar, whose directors were identified as a Mr Desai and Mr Amoke, used the same to secure a Sh200 million loan from Trust Bank, which went into insolvency, collapsing with depositors money.
The private developers obtained the title to the land in October 1996 after they reportedly told NLC that the council was relinquishing interest in the property, since they were not ready to develop it.
Details of the proceedings held before the NLC in 2016, show that the plan to construct the NCPD headquarters flopped after donors who had expressed interest to help them build, Norad, exited Kenya acrimoniously, in the heat of the government’s differences with World Bank over funding.
Subsequently, the then Commissioner of Lands asked the Permanent Secretary for Home Affairs, under whose docket NCPD fell, to allow the plot be allocated “to people who were ready to develop because NCPD was taking too.”
The PS is said to have consented to the request, a move that saw Rosestar allocated the land.
However, both the Ndung’u Land Commission and recently NLC faulted this as an irregularity, with Swazuri in his finding saying the allotment to Rosestar was issued before the PS for Planning, under whose docket NCPD had since been transferred.
Earlier, the courts gave Rosestar a clean bill of health on acquisition of the land. Rosestar lost the ownership of the land after using the title to secure the loan with Trust Bank.
The Deposit Protection Fund (DPF), which has now changed the name to Kenya Deposit Insurance Corporation, took ownership of the title deed from the insolvent Bank upon its liquidation and created a valid charge on the title so that they could recover money through the sale of the land to pay some 40,000 depositors who were owed by the bank.
“DPF pleaded with the Commission (NLC) to uphold the title in the name of Rosestar so that they could invoke their power of sale and realise their security in order to pay the numerous depositors. According to them, cancellation of the title would deprive the depositors of their money, most of which were their only life savings,” explains Swazuri in his defence to NLC’s action.
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The reasons advanced by Swazuri however angered the PIC members who demanded that the private ownership be revoked and the ownership reverted to the Government.