The sale of a parcel of land that belonged to former Vice President Joseph Murumbi was beyond reproach, the managing director of the State agency that sold the property, insists.
Lucas Meso, the Agricultural Finance Corporation (AFC) managing director, said North Mugor Limited acquired the land after a 13-year period that saw most of the earliest bidders spooked by the farm’s squatter problem drop out.
Two other bidders failed to meet the corporation’s counter offer.
Mr Meso said AFC received all the Sh63.4 million from North Mugor as payment for the 976 acre-land hived from the initial 2,090-acre Intona Ranch.
AFC, a development financial institution which extends loans to individual farmers and corporations, took possession of the land after Intona Ranch defaulted on a Sh8.6 million loan it had borrowed on September 16, 1985.
Some 836 acres of the land had been offered as collateral for the loan.
By August 20, 1989, the outstanding loan plus interest had snow-balled to Sh24 million, with the company left with little to no option but to recall it.
Thirty years later, the land was sold to North Mugor Limited, through their lawyers Kemboy & Co Advocates.
A human rights group, Trusted Society of Human Rights Alliance, recently accused AFC of undervaluing the land, noting that the public might have lost close to Sh180.5 million. The human rights lobby had also alluded to corruption, insisting that the corporation did not receive the full amount.
But AFC said the sale of the 976 acres was informed by two “professional” reports done in a span of three years -- May 23, 2012 and September 9, 2015.
The first valuation by Hectares & Associates valued the entire piece of land, the 2,090 acres, at open market value of Sh124 million while another one by Highland Valuers Limited, put the open market value at Sh130 million. The second valuer also estimated the forced sale value, the auction price, at Sh97.5 million. The corporation says that, unlike another two bidders who had expressed interest, North Mugor Holdings accepted its counter-offer on September 16, 2015.
The sale agreement between the two was executed on October 19, 2015 with the buyer making the required down payment of Sh15,860,000 in two tranches.
The first tranche of Sh9,860,000 was paid on September 25 while the second tranche of Sh6 million was received by the corporation on November 6, 2015.
The MD goes on to say that the balance of Sh47.6 million was received on November 16, 2015 through three transactions in one of its National Bank accounts.
Meso is now reading mischief in the renewed interest in the land. “It is clear that third parties with no locus in the matter have at all times tried to deprive the corporation of this property, hiding under adverse and ancestral rights claims. This activism should not be entertained,” he said in documents that the Sunday Standard has seen.
He said three groups had presented various complaints on the parcel and that 99 members of the Moitanik clan were given part of the land, 1,089 acres, through a court settlement.
A second claim by 358 members of Uasin Gishu was voluntarily withdrawn while a third one by a Mr Kitui Yiamboi was dismissed by the court. There were nine bidders early on. The corporation says that save for North Mugor and two other bidders, most of the offers earlier given were not pursued further after the bidders learnt of the land’s squatter problem.
North Mugor’s offer was initially lower than that of two other bidders, who each offered to purchase 976 acres of the land at Sh60 million. North Mugor had offered Sh50,000 per acre which translated to Sh48.8 million.
AFC got back to the three bidders with counter-offers. It wanted Sh63.4 million from North Mugor. The corporation says most of the offers given earlier were not pursued further after the clients learnt that the property was heavily squatted upon.
In 1998, the corporation’s attempt to auction the land fell through with no bidders found. As a result, AFC was forced to bid for the land through its agency. Meso said Section 33 (2) of the Agricultural Finance Act, gives the corporation the powers to bid in its auction through an authorised agency.
It was declared the highest bidder, with the corporation paying Sh28 million for the land. It got the land’s title in May 2002.
Seeing a lot of interested parties, and fearing loss of public funds, the management resolved to recover money by disposing of 976 acres. Meso said the many cases made it difficult for the corporation to dispose of the parcel of land at the earliest opportunity, explaining the reason why it had taken it 30 years since the loan was advanced to Intona Ranch. “In undertaking this disposal, the corporation acted above board and in accordance with the law, determined to make a decision in the best manner possible to ensure that public funds were secured,” he said.
The MD also said that the regime that was used to dispose of the land was the Agricultural Finance Act and not the Public Procurement and Disposal Act.
“Requiring the corporation to apply the provisions Public Procurement and Disposal Act in recovery of debts is a misapprehension and misapplication of applicable laws,” said Meso.