Njenga Karume's children now want professionals to manage vast estate

From left: The late Njenga Karume's children Jane Mukuhi, Albert Kigera, Samuel Wanjema and Lucy Wanjiru inspect one of their father's properties. [PHOTO: JOHN KARUME/STANDARD]

The tussle for the late billionaire Njenga Karume's estate pitting the trustees against his children who allege mismanagement rages on.

Three of his children now want the trustees appointed by their late father to exit allowing for another 'professional group' that they will appoint to run the affairs of the multi-billion shilling assets.

According to Lucy Wanjiru Karume, one of the children who want George Waireri, Henry Karume, Kung'u Gatabaki and Margaret Kamithi to stop managing the former minister's estate, some of the trustees were never appointed by her late father before he died.

She said that the chairman of the trust, Mr Waireri, ought not to have taken the helm of the trust after Justice Kihara Kariuki stepped aside.

Ms Karume told The Standard the trustees did not consult them when the decision was made.

"We want our father's estate to be run professionally like the Chandaria and Ford foundations. We want professionals to be hired to hold the trust. We want a trust that communicates with the beneficiaries and that are purely professionals. Let the current board step aside and allow us to appoint a new team," she said.

She added that her father's hotel in Mombasa and two restaurants were being destroyed without their knowledge, an allegation denied by lawyer Kamau Karori, whose firm is representing the executors of Karume's will.

On Jacaranda Hotel, Village Inn and Pizza Garden, Mr Kamau said Karume's children were at all times aware that the trust was to renovate the hotel and the restaurant.

The lawyer argued that the trustees do not sit at the on the company's (Jacaranda Holdings) board, adding that one of Karume's sons, who is also a petitioner, is part of the management that makes decisions on what is going to happen in the estate.

It has emerged that Albert Kigera, Ms Karume's brother, who also wants the trustees to bid goodbye to the vast estate, is a director of Jacaranda Hotel Limited and had attended numerous meetings at which the board discussed issues relating to giving the hotel a new face.

"The decision to refurbish Pizza Inn was as a result of competition from other restaurants in the area. There are orders already stopping any construction from going on and thus nothing can be done without first clearing the court case," Kamau said, adding that the children knew about it.

According to Mr Kamau, the decision to renovate Pizza Inn was mooted when Karume was still alive and the main aim was to have a 10-storey building, with the ground floor being the restaurant and the other nine being rental offices, an idea that was allegedly agreed on by all, including the children.

"How do the children expect that they file a suit and the trustees do not defend themselves? There are no foreign firms that are representing the trustees in the case and all those lawyers in the suit are known by the parties," said Mr Kamau.

He said that his firm, Iseme Kamau and Maema (IKM) advocates had been hired by the late Karume to execute his will and that in the case, they are representing the executors of the will.

When the self-made billionaire made his last wishes, he wanted to have his legacy to last from one generation to another. He drew a will in which he left his children some of his wealth, and created a trust with the aim of having his businesses ran without sibling interference.

The will is already being challenged before the court and thus it cannot be executed as he had hoped when he breathed his last, and the trust is now a matter for the courts as well.

Not making profit

His estate is ran in three segments - agriculture, hospitality and real estate. Each according to his wishes, is ran by a holding company which in turn reports to the board of trustees.

The trustees hold that the businesses were not making a profit and thus there was a need to revamp the same in order to satisfy Karume's last wishes to grow his empire 5-fold.

However, Karume's daughter argues that the trustees have not made anything of what was left by her father. Ms Karume said the beneficiaries want the estate intact. She alleged that prime properties have already been sold, a claim that had been raised in court in their bid to stop the trustees from running the estate.

In their court papers, Karume's kin had also claimed that over Sh1.1 billion raised from the sale of a piece of land by their father to the Kenya University Staff Retirement Benefits Scheme had not been accounted for. But in their defence, the trustees and the law firm at the centre of the sale claimed that every single shilling from the proceeds had been utilised and the returns had been filed in full.

Mr Karume had instructed IKM to sell the land with a view to settling any debts before he died. Filed in court, communications between the IKM lawyer Anne Kinyanjui and Karume's Company Secretary Naomi Kariru indicated that the money had been utilised as per the wishes of the late Njenga.

Mr Kigera in his court papers had told the judge that the family had been unable to access any information on how the money had been spent. However, letters and emails between IKM and his lawyers tell a different story.

Mr Kigera's brother, Samuel Wanjema, who is also a petitioner in the case had written to IKM on January 11 this year asking how the entire amount was disbursed and how much the firm had retained. He had allegedly written in his capacity as a director of Cianda Estates Limited.

"I do request you to give me a statement of account showing how the purchase price was paid out and the balance held by your firm," the letter addressed to the law firms managing partner read.

And in a letter dated February 10 to Mr Wanjema, IKM informed him that it had accounted for the proceeds of the sale, which was in turn confirmed by Kariru and thereafter the same was given to the trust and Karume's company's auditors.

"It is our sincere hope that all parties involved in or interested in the estate of the late Njenga Karume and the beneficiaries of the Njenga Karume Trust will at all times maintain decorum and honesty. We are happy to discuss with the company any matter relating to the property," the letter filed before the court read.

On February 29, Cianda Holdings Chairman Kigera Thuo wrote to the law firm indicating that Mr Wanjema had not been authorised to demand for details pertaining to the sale of the land and the proceeds of the same. Karume's two sons Wanjema and Kigera, and their sister Wanjiru have filed two separate cases.