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Investors feel the pain of new war on impunity

By Vincent Achuka | Published Sat, August 18th 2018 at 00:05, Updated August 18th 2018 at 00:09 GMT +3
Members of public mill around Airgate Centre, formerly Tajj Mall, along Outering road, Nairobi. The proprietor of the mall has been served with a notice to bring down the complex by August 30, 2018. [Elvis Ogina, Standard]

In summary

  • Demolitions have targeted buildings worth billions of shillings sitting on riparian land and illegal structures set up by small scale traders
  • The county also plans to limit the number of matatus entering the CBD in a bid to ease traffic

For a country yearning for real change, the ongoing war against impunity and corruption comes at a huge cost that few would have expected.

Like a doctor prescribing a cocktail of drugs that shocks your system as it triggers your body to fight an infection, the battle is affecting not just the hitherto untouchable elite but hundreds of Kenyans caught in between fighting to stay afloat.

ALSO READ: Nema wants ten buildings declared unsafe for human occupation

It is impossible to know where the war ignited by the leaking of a second NYS scandal in May will head next.

In just three months, however, the war against graft has targeted at least five parastatals before turning on buildings constructed on illegal sites.

In Nairobi, small scale businesses like vegetable vending, roadside kiosks and second hand clothes shops are giving way as the Regeneration Committee demolishes illegal structures.

Mutindwa market famous for second hand clothes is now a memory, the decades old garages at Globe Cinema roundabout have been decimated and more is yet to come as the demolition moves to the counties.

For Nairobians, the rubber will meet the road when matatus are prevented from accessing the Central Business District and residents forced to walk for kilometres to get public transport.

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A meeting between matatu Saccos and the committee on Thursday over the impending order did not yield results.

“It will be a tough policy to implement if alternatives are not given,” says Matatu Welfare Association chairman Dickson Mbugua.

But with the momentum in the last two months, political goodwill and the praises the government is getting locally and internationally, that policy like the arrests and demolitions witnessed may not be too far.

ALSO READ: Demolitions must end impunity and usher in a fresh beginning

Reports that a section of Weston Hotel in Nairobi had been reportedly marked for demolition for encroaching on Kenya Civil Aviation Authority land is the latest in the war that is turning out to be a nightmare for many billionaires. Deputy President William Ruto has interests in Weston while Ramesh Gorasia who vied for the Nairobi senatorial seat in the last elections owns Taj Mall which is set to go down too.

Friday the Sanghrajka family who also own Tile & Carpet Centre joined the fray of rich people whose turn to cry has come when it emerged that 14 Riverside has been marked for demolition too.

“Since the Mall affects the flow of traffic within the county and the fact that the said affected road is within Nairobi City County, we shall have no alternative than demolish the encroaching part without any further notice to the owner,” Nairobi Governor Mike Sonko said of Taj Mall.

Also set to join this list are Iranians Hamed Ehsani and his brother Mehraz Ehsani who own the Tribe Hotel that has been identified as partly sitting on riparian land.

A sitting and former governor who jointly own a multi-billion shilling property in Kisumu will also be counting losses when the bulldozers hit the lake side town.

They will join Bimal Shah of Ukay Centre and former MP Stephen Manoti who lost South Gate Mall after years of controversy.

“I do not want to talk about it. It does not help anyone,” said Mr Manoti of his predicament.

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The owners of 14 Riverside Drive are however adamant that they are not on riparian land. The complex hosts the Dusit D2 hotel and multinationals like Colgate Palmolive and Reckit Beckiser.

“The development acquired all the requisite approvals prior to construction from all regulators. It also has all required occupation certificates and is compliant with all regulatory requirements under the Kenyan Law,” insists Knight Frank who manage 14 Riverside Drive.

And although affected property owners have been quick to say they did not receive prior intent of demolition of their buildings, the Saturday Standard has learnt that all developers were notified in May following a presidential directive.

But since most landlords are not informing their tenants in the hope that they will convince the state to change its mind, the resulting uncertainty is causing jitters to the occupants of these condemned buildings, some of whom are running businesses worth millions.

“It’s awful for us. I and my wife (Dr Wandia) have been here for five years,” Steve Evans who owns Kenya Orthodontics located at the New Muthaiga Shopping Mall and is afraid it will be demolished told us in an email.

“If I stay put and the bulldozers come I will lose over Sh30 million of equipment. If I pack it will take up to 3 months to build another clinic,” he said.

Insurance agencies cannot compensate in case of a government demolition for property sitting on illegal land leaving banks and developers to shoulder the burden. It is a double blow for property owners who despite losing their buildings have to foot the cost of a demolition.

Banks have however said they are not to blame for funding buildings sitting on riparian land.

“If the construction had been used as security then that leaves the banks with a concern because they will have to get alternate collateral. Right now we cannot tell the extent of the industry exposure,” Kenya Bankers Association chief executive Habil Olaka said last week.

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But laughing all the way to the bank are scrap metal dealers and top lawyers pocketing the millions of shillings those suspected of graft are willing to pour in order to avoid spending years eating boiled beans behind bars.

Scenes of security guards protecting what is left of what were once multi-billion properties against street boys and vandals looking for metals and other valuables have become a common sight in Nairobi.

But in the corridors of justice, lawyers are having a ball even as the courts withhold conservatory orders. Charles Mwalimu, a criminal lawyer has equated this season to the period immediately after the elections when there are a lot of petitions and a scramble to get legal representation.

Legal services

“It is not even about monetary value per se but the exposure you get as a lawyer in a season like this,” he says.

“If something is in public interest like the graft cases before court, then you have to leave everything and dedicate all your time to the case. This means the legal fees goes up but services are mostly charged based on the monetary value involved,” he says.

Cliff Ombeta is representing the Ngirita’s, Katwa Kigen and Harrison Kinyanjui are representing former Kenya Power Managing Director Ken Tarus, Tom Ojienda is representing former National Lands Commission chair Mohamed Swazuri and Ken Nyaundi is representing former Kenya Bureau of Standards MD Charles Ongwae.

Other lawyers making money are Stephen Ligunya whose client is former Youth Affairs Principal Secretary Lillian Omollo while Assa Nyakundi, Kiraithe Wandugi and Migos Ondaba represent some of the 49 NYS suspects. Nyakundi is also representing former Nyandarua Governor Waithaka Mwangi in an abuse of office case.

ALSO READ: Taj Mall owner dares State to demolish property

It is no easy to know how much the suspects are paying for legal services. Lawyer Cliff Ombeta for example sued Pastor James Nganga for failing to pay him Sh5.1 million in legal fees in 2015.

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