Barons grab public college and its Sh32bn land, demand rent

In one of the most daring heists of a public property, a classic case of impunity and power abuse, land and buildings worth Sh32 billion have been grabbed, leaving an institution paying rent on what it used to own.

The entire 200 acres belonging to the Kiambu Institute of Science and Technology (KIST) — where an acre goes for more than Sh100 million — has been taken over and subdivided by an entity styled as The Registered Trustees of Kiambu Institute of Science and Technology.

RENT
Worse, the entity has been demanding rent from the institute founded by President Jomo Kenyatta and other leaders from Kiambu County in 1971.

The land was bought with money raised in harambees.

And because it owns no land, KIST has not been registered afresh under the 2013 Technical and Vocational Education and Training Act.

COLLEGES
When they were mooted — and most have now become universities — these were community-based colleges offering apprentice courses with the support of the government.

These included Nyeri’s Kimathi Institute, Murang’a College of Technology, Western College of Science and Technology and Ramogi Institute of Technology (RIAT).

SUSPECTS

At the centre of the KIST scandal is former commissioner of lands and Kiambu millionaire James Raymond Njenga, former chairman of the Kenya Association of Manufacturers (KAM) Allan Ngugi and Nairobi lawyer George K. Waruhiu.

Also involved in the scam are quantity surveyor Kimani Mathu, who is Liberia’s Honorary Consul to Nairobi, and former Nairobi town clerk Joseph Njuguna Thairu.

TRUSTEES

Contacted for comment, Mr Ngugi, the chairman of the Board of Trustees (BoT), said at first that “there was no time that the land was owned by KIST. That land was always in the name of the trustees.”

But, challenged on the transfer dated December 2013, he changed tune and said they did not know how the land changed hands from the trustees to Kiambu Institute in the first place.

“We tried to enquire about the thinking and we couldn’t get to the bottom of it. We decided to return the land to the trustees.”

TITLE DEED
Interestingly, the transfer documents were drawn up by the legal firm of one of the trustees, Waruhiu & Co., which is based on 12th Floor of International Life House in Nairobi, on December 3, 2013.

In the documents, now being studied by the Ministry of Lands, Mr Njenga and Mr Ngugi, while serving as the bona fide trustees of KIST, entered into an agreement with themselves and transferred KIST’s title deed LR 81/32 to the entity, leaving the institute with no land.

This transfer was an illegality, since the Technical and Vocational Education and Training Act, whose date of commencement was June 2013, vests management and ownership of the public assets in the board of governors.

ESTABLISH

The law also prohibits the board from disposing of any property without the consent of the Cabinet secretary.

When KIST was being mooted in the early 1970s, a corporate body known as The Registered Trustees of Kiambu Institute of Science and Technology was registered by then minister for Lands Jackson Angaine and brought together senior Kiambu leaders to hold the land in trust for a short time, pending the building and registration of the institute.

The original trustees included then Attorney-General Charles Njonjo, State House Comptroller Eliud Mathu, Nairobi mayor Margaret Kenyatta, businessman James Njenga Karume and East African Power and Lighting MD Julius Gecau.

Others were University of Nairobi Vice-Chancellor Josephat Karanja, lawyer Samuel Waruhiu, medical doctor Joseph Mungai and Archbishop Obadiah Kariuki.

REGISTER
Each one of these trustees — appointed on August 19, 1971 — was to hold office “until he or she dies, resigns or is requested by a majority of his or her co-trustees to resign”.

Of the original trustees, only Mr Njonjo is alive, but he doesn’t seem to be involved and his name is not on the letterhead.

KIST was officially registered on May 1974 as a company limited by guarantee, which meant it was a public not-for-profit entity.

MANAGEMENT

Four years later, in 1978, the registered trustees transferred the title to Kiambu Institute of Science and Technology Limited to secure the land.

The transfer was witnessed by Mr Njonjo, Miss Kenyatta, Mr Gecau and Mr J.K. Koinange.

But 35 years later, and as the government moved in to streamline the learning and management of vocational institutions by vesting their running in new boards of governors, the KIST trustees decided to transfer all its property to the entity that they controlled.

TRANSFER
Although there was a caveat registered in 1974 to protect the land, this has since been removed.

They transferred the college land first, as directors of KIST, to the old entity, The Registered Trustees of Kiambu Institute of Science and Technology, where they also held sway.

In essence, the right hand transferred the land and properties to the left.

SIGNATURE

The new group is independent of the BoG and has been trying to force the board to agree to take only 33 acres.

“It is true we have signed transfer documents and all we are waiting for is for the BoG to append their signatures,” Mr Ngugi said.

But sources say that the BoG has refused to sign.

Transfer documents dated June 2017 have been drawn up by Kinuthia Wandaka & Co advocates, located in the nondescript Mfangano Trade Centre in down-market Mfangano Street, Nairobi.

LOAN

They were signed by Mr Ngugi, Mr Mathu and Mr Joseph Thairu on behalf of the “beneficial owner” of KIST and witnessed by Nairobi lawyer Kinuthia Wandaka — who has signed in advance that he has witnessed the BoG chairman and secretary append their signatures to the documents!

Contacted, Dr Kamau Kariu, the BoG chairman, said he had “no comment” on the matter.

We have also established that before they started the transfer, the trustees approached Co-operative Bank in December 2012 and took out a Sh100 million loan “to finance operation and development costs in the institution”.

MEETING

Though it was granted, there was no project done with the loan and all the buildings at the college pre-date the 1980s.

Those who signed for the loan were Mr Ngugi, Mr Njenga and Mr Wainaina.

However, Mr Ngugi has denied that the trustees took out the loan.

“It is the Kiambu Institute which borrowed the money,” Mr Ngugi said.

Documents in possession of the Nation, however, indicate that the trustees first met on November 13, 2012 and deliberated on the loan.

REPAYMENT

The BoG was brought in on December 14, 2012 and, in their minutes, they identify the BoT as the borrower.

The institution is now forced to repay the loan from student fees since it has no extra income.

When the current BoG was inaugurated, they found that KIST had a Sh158 million loan.

BALANCE

Managing to pay only Sh10.5 million per term in May, September and January, they have so far repaid Sh90 million.

Because of the interest, the college is only able to pay three times a year, when students pay fees, and bank records show the outstanding balance as Sh153 million.

There is another loan of Sh100 million granted on April 28, 2014 whose purpose is unclear.

COFFEE ESTATE

Money from KIST’s 76-acre coffee estate is taken by the trustees, who also force the principal to pay rent on what was previously the principal’s house at market rate.

Initially, the farm income used to subsidise the institution.

The trustees have “allocated” the remaining 167 acres to a commercial centre, a social amenities centre, rental housing and coffee research farm, and 61 acres for the “proposed” Kiambu University of Technology and Innovation.

It is not clear who will own the new entities.

ASSETS
A letter by Mr Mathu to KIST principal Michael Gaitho presented last December to the BoG says:

“The Registered Trustees of KIST” own “all KIST assets” and has been challenging the BoG “to provide documentary proof of government policy in minimum land requirement for institutions like KIST”.

But records show otherwise.

Mr Mathu also claims the houses at the institution are owned by the BoT.

While the matter was taken up with the Rent Tribunal, which ruled that the houses belong to the institute, he says that “this ruling is in error”.

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