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Njenga Karume’s children win against trustees in battle over control of his multi-billion shilling empire

Trustees running the late billionaire Njenga Karume’s businesses on behalf of his children have been kicked out of the multi-billion shilling empire by the court due to accountability issues.

The high court ordered the removal of George Ngugi Waireri, Kung’u Gatabaki and Margaret Nduta Kamithi from the Njenga Karume Trust and the Njenga Karume Trust Registered Trustees.

This was after some beneficiaries, who are the late Karume’s children, led by Albert Kigera, Lucy Karume and Samuel Wanjema, applied for the removal of the Trustees.

The beneficiaries were represented in court by lawyers Peter Munge and Daniel Musyoka of MMC ASAFO in their application for the removal of the Trustees.

The empire of the late Mt Kenya senior politician and former powerful cabinet minister was estimated to be worth Sh50 Billion at the time of his death in 2012.

The businesses include the Jacaranda Hotel in Westlands, Indian Ocean Beach Resorts in Diani and Cianda House along Koinange Street in Nairobi.

The judgement delivered by Lady Justice Aburili on Thursday, noted the three Trustees were found to have breached the Trust Deed and also held personally liable to indemnify the Njenga Karume Trust and the Njenga Karume Trust Registered Trustees for losses and damages suffered by the entities and their beneficiaries.

Before he died, Mr Karume had established a private trust to which he transferred 99 percent of his businesses and also appointed trustees to run them.

After his death, and following the resignation of Justice Kihara Kariuki (retired), George Ngugi Waireri and Margaret Kamithi were appointed as trustees.

According to court papers, Karume’s kins said the appointment of Waireri, Nduta and Njenga as the Trust’s chairperson, new Trustee and second observer respectively was done without notice or reference to the beneficiaries, regard to the provision of the Trust document or the will and intention of their father.

The court has also ordered the removed trustees to give an account of all transactions undertaken, payments made, funds received and expenditures incurred on behalf of the Njenga Karume Trust since 24th February 2012.

“Upon such accounts being rendered, the court shall determine whether there was any dishonesty on the part of the Trustees in their dealings with the Trust assets and indemnity of the trust shall be ordered only after such evidence discloses dishonesty on the part of the Trustees,” said Siaya High Court Judge, R.E Aburili, in the ruling.

The court found that the trustees also failed to account for Sh280 million, the balance from the sale a parcel of land to Kenyatta University Retirement Benefit Scheme.

The Karume chilsdren had told the court they are yet to get details of various bank accounts held by their father before his death, transaction between companies and beneficiary accounts.

The Trustees were also found to have borrowed substantially from financial institutions without consulting the beneficiaries of the Trust and its instruments.

The court agreed with them that they had been locked out of the running of their late father’s businesses, disposal of assets and treated with a lot of contempt.

“I direct Mr. James Kamau of IKM shall supervise the exit process for the removed Trustees who shall prepare and file into court the said accounts within the next one hundred and eighty (180) days of this date,” said Judge Aburili.

The Court said it will then assess the losses and damages incurred and or suffered by the Njenga Karume Trust out of the acts and actions of the Trustees of the Njenga Karume Trust and the Njenga Karume Trust Registered Trustees.