Court Date for Mugo Kibati Over Ksh14B Land Deal

Telkom Kenya Chief Executive Mugo Kibati is among senior Telkom executives facing prosecution over the controversial sale of a land parcel along Ngong’ Road valued at Ksh14 Billion.

Senior Principal Magistrate Kennedy Cheruiyot authorized private prosecution against Kibati and others including former CEO Michael Ghossein, Secretary to the Board Lois Allela and board members over the alleged fraudulent sale. Cheruiyot noted that the Director of Public Prosecutions (DPP) and the Directorate of Criminal Investigations (DCI) failed to act on the matter despite it being brought before them in October 2020.

The matter was brought before the court by the Postel Housing Co-operative Society which represents hundreds of staff formerly employed by the defunct Kenya Posts and Telecommunications Corporation (KPTC). They maintain that in the 90’s, they paid to acquired 60 acres of the 79-acre parcel of land that has since been compulsorily acquired by the government.

It recently emerged that the government is building a sports facility known as Jamhuri Sports Complex on the land parcel, with focus on strengthening Kenya’s bid to host the 2025 World Athletics Championships.

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Businessman Francis Mburu has also laid claim to the land citing a previous agreement with the co-operative society. His firm, Exclusive Estates Limited entered an agreement with the society to develop residential houses although the project stalled in 1995.

Mburu later stated, in 2009, that the society had signed over their interests in the land to his firm.

“I find that this application fits the criteria for a private prosecution as it has been demonstrated that reports were made to the DCI and DPP from October 5 last year setting out the complaint by the sacco members but declined to take action in the matter having had an opportunity to do so,” Senior Principal Magistrate Cheruiyot ruled.

Members of the sacco had funds deducted from their monthly payslips after they agreed to purchase the land at Ksh350,000 per acre. According to the sacco officials led by Henry Belsoi, members had contributed over Ksh23 million by the time contributions were stopped.

They allege that Telkom fraudulently sold the land to AFTRACO for Ksh1.5 billion.

“There is no doubt that the said action of purporting to sell the said parcel of land to a third party amounts to outright commission of fraud on their part and the part of the Telkom Kenya board,” Belsoi stated in an affidavit.

After the matter was referred to arbitration in 2019, the arbitrator — Zehrabanu Janmohammed noted that there were three enforceable contracts entered between the parties since 1993.

The first was between KPTC and Postel for the sale of 60 acres of the Ngong’ Road land for Ksh21 million, while the second was between Postel and Mburu’s Exclusive Estates Limited for the residential housing project.

The third was entered in January 2009, where Postel allegedly signed over its interests in the land to Exclusive Limited.

Telkom was directed by the arbitrator to subdivide the land within 90 days and for Exclusive to pay Ksh21 million for the parcel. The decision was, however, challenged by Telkom who argued that the land was worth billions based on a valuation from a firm commissioned by the telco.

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