Hustle

Shadowy landlord walks away with Sh1.1b profit after selling Integrity Centre

Integrity Centre, headquarters of Ethics and Anti-Corruption Commission. PHOTO | FILE
Integrity Centre, headquarters of Ethics and Anti-Corruption Commission. PHOTO | FILE

The National Land Commission has paid Sh1.5 billion for Integrity Centre, the building that houses the Ethics and Anti-Corruption Commission (EACC) in Nairobi, after toing and froing on the deal over the prime property.

The NLC, in a notice in the Kenya Gazette dated September 14, said the building housing the ethics and anti-corruption agency will be taken over by the government after compulsory acquisition from Tegus Ltd.

Valued at Sh400 million four years ago, the deal means taxpayers handed a Sh1.1 billion profit to the owners of the firm, whose owners remain unknown.

“The National Land Commission determines that the property set out in the Schedule hereto shall, with effect from the date of the publication of this notice, be transferred and vested in the Permanent Secretary, The National Treasury,” the NLC said in a notice signed by acting Chairperson Abigael Mukolwe.

The property at the junction of Valley and Jakaya Kikwete Roads measures 0.4867 hectares, Ms Mukolwe said in the notice, which took effect on August 29. It is listed as LR No. 209/1069.

SH 5.8 MONTHLY RENT

Currently, the EACC is paying a monthly rent of Sh5.83 million, which comes to Sh70 million a year. The amount was revised upwards in a 2015 lease renewal that was supposed to end this year.

The EACC has been housed at the premises since 1997. The property was previously owned by the collapsed Trust Bank.

The bank, associated with former minister Nicholas Biwott, collapsed in 1993, and when the EACC started using the premises four years later, the property was held as a public asset by the Deposit Protection Fund (DPF).

The battle for the property started in earnest after Revack Ltd, a company associated with former Cabinet minister the late Nicholas Biwott, and Tegus Ltd, both publicly laid claim to.

According to documents presented in Parliament by the EACC, the building had been charged to the DPF because it was owned by Revack Ltd, a company that owed Trust Finance Ltd Sh152.5 million. Trust Finance was owned by the collapsed Trade Bank.

Revack paid Sh115 million to the DPF and added Sh356.8 million collected as rent since September 1998, bringing the total recovered from the former to Sh471.8 million.

OWNERSHIP REVERTED

After this settlement, the EACC said, the ownership of the property reverted to Revack Ltd, which then transferred the property to Tegus Ltd in a Sh400 million deal in 2013.

The EACC report was presented in the House after Revack, the firm associated with Mr Biwott, threatened to evict the commission after it said it would not renew its lease.

“As you are aware, your lease expires on June 30, 2015. The owner demands you deliver vacant possession of the property after full restoration at your cost as required in the lease,” reads the letter dated February 18, 2015, sent by Mr SK Kiplagat of Kipkenda & Company Advocates.

But in July 2015, the lease extended by a further three years, which was to end this year.

In July this year, the NLC approved the compulsory acquisition of the building after conducting an inquiry in February on the transfer of the land to Revack in November 1994, before it was charged to the collapsed bank, and later discharged in June 2017.

SHAREHOLDERS

In documents submitted to Parliament in 2015, the registrar of companies identified the shareholders of Tegus as Watuwatu Ltd and Sunnex Enterprises Ltd, with a Ms Rachel Wanjugu Muthui and Mr Anish Doshi as directors and minority shareholders, respectively.

Watuwatu and Sunnex own 49 shares each, while Ms Muthui and Mr Doshi own one share each.

Watuwatu Ltd is owned by lawyer Ahmed Adan and Ms Asma Ahmed Adan. Both Tegus Ltd and Watuwatu Ltd were registered on the same date — March 13, 2013, and are situated at the same address, Bruce House on Standard Street in Nairobi.

The proposal for compulsory acquisition came after the Treasury rejected a request by the EACC to be given Sh400 million to build its own headquarters.



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