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Ugly past returns to haunt Julius Mwale, man behind Sh200B mega city

By Paul Wafula | Published Sun, February 25th 2018 at 00:00, Updated February 25th 2018 at 03:24 GMT +3
Julius Mwale, the man behind the Sh200 billion mega city investment in Kakamega County. [Photo: Standard]

No many people can pull their country’s military into their web of lies.

Julius Mwale, the man behind the Sh200 billion mega city investment in Kakamega County, has not just been economical with the truth about his days at the Kenyan Air Force, but he nearly got away with it.

An official account from the military is the latest revelation that peels off yet another layer of the multifaceted life of the multi-billion shilling investor has carefully woven together over the years.

According to military records, Mwale was enlisted into the Kenya Defence Forces (KDF) in 1994. 

After basic military training at the Recruits Training School Eldoret, he was posted to the Kenya Air Force (KAF) as an Untrained (UT) ground Radar Technician.

“It is during this training that he absented himself without leave (AWOL) on May 27, 1999 at 0800hrs. He therefore never qualified nor graduated as a radar technician nor as an aeronautical engineer as earlier claimed,” Kenya Defence Forces (KDF) spokesman Col David Obonyo, told Sunday Standard.

Lack approvals

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Mwale reappeared on June 9, 2010 and surrendered to military authorities at 10am, having deserted for 11 years, 14 days and 2 hours.

“He was charged and dismissed from the Kenya Air Forces on the same day, in the rank of Private class 2, having served for only 4 years and 13 days reckonable service and not 6 years as claimed,” Col Obonyo said. 

The revelation now throws another spin on the businessman’s rosy past that helped brand himself as a technology genius, a real estate mogul, inventor and philanthropist. 

It is not the only revelation set to shock investors into his project, some that bought into his brand, without bothering to do an independent due diligence.

Sunday Standard has also established that his medical and technology city, which he says is on course to be completed in the next two years, is yet to receive necessary approvals from the National Environment Management Authority (Nema).

“We have not approved any such project. I have no doubt in my mind. Such a grand project would require a rigorous environmental impact assessment study, it would be published in the Kenya gazette and a newspaper of national circulation,” Mr Zephania Ouma, the deputy director Compliance and Enforcement Officer at Nema said.

Mr Ouma says he would know if approvals for such a project that has a power plant and an airport have been given.

“Before approvals, it would have to undergo public participation,” he added saying the best guess would be that the firm is still at the preliminary stage.

But lack in approvals has not stopped the businessman from bringing on site contractors to prepare the ground for the airport, some who bolted after noticing too many incomplete sentences in the Mwale  City narrative. “There was one who mobilised his equipment and came all the way to Butere to break ground for the airport. He brought a crane and six other heavy machinery. But he left when he sensed trouble, he was the lucky one,” an insider who knows the project inside out said.

Whenever he gets a chance to tell his audience the story of his life, Mwale says he fled to the US in 2000 seeking asylum after differing with some unnamed people in the air force over intellectual property rights.

“The regime at the time wanted to have complete control of the technology which led to differences between us and ultimately I was forced to flee the country,” he told reporters then.

He says after the fallout, he left by boat to Uganda where he stayed for some time. But he did not feel safe so he says he fled to Zimbabwe.

It was while in Zimbabwe that he sought asylum in the US.

His flight for freedom ended at the footsteps of Charles Gay Homeless Shelter in New York where he stayed for a year writing the next chapter of his life.

While in the US, Mwale joined the short list of Kenyans who had offended courtrooms on two separate ends of the world.

Sunday Standard’s investigations unearthed a series of court matters from his days in the US that point to the kind of man he was and still is.

But most importantly, they give telling details on the man’s relationship with money, or rather, the lack of it.

Before he came back to the country, Mwale had put his loan guarantor in trouble in the US after he failed to pay Sh15million he had acquired.

His guarantor, a Ms Fiona Graham was dragged to the Nassau County Supreme Court which ordered her pay the debt that had been defaulted on.

Court records show that in 2007, at the suggestion of Ms Graham, Mwale was lent Sh15 million ($150,000). His company, SBA Technology, guaranteed repayment of that loan.

“When the loan was not repaid, plaintiff (lender) obtained a Judgment by Confession (“Judgment” against Julius and SBA in the sum of $150,265,” the judgement entered on December 9, 2009 reads in part.

But despite this finding, Mwale did not pay which saw the lender institute contempt of court proceedings against him in the Supreme Court of New York.

The court heard that Mwale needed the guarantor so that the lender ‘would stop harassing him or going after him with enforcement proceedings. This would free him from being distracted so that ‘he can focus on his business projects in Africa.’

The guarantor had also advanced Mwale ‘substantial investments’ to support his projects in Africa. In the end, Supreme Court judge Hon. Timothy Driscoll slapped Mwale’s guarantor with the bill, ruling that she had to pay $159,000 (Sh15.9 million) plus interest, costs and disbursements over the loan’s non- performance.

It is not the only court case that he was involved in while he was in the US.

Born in Butere in 1976, he says he developed interest in the field of technology when he joined the Armed Forces in 1994. He says he enrolled at the Kenya Armed Forces Technical College for a national diploma in Telecommunication Engineering. His priorities in school, he says revolved around sports, engineering and business.

The medical city is not the only dream that Mwale has sold in the country.

Billions of shillings

Mwale first rose to the public limelight in 2010, when he took the country by storm when he returned as the President and Head of Strategy of US-based SBA Technologies Inc.

He caught attention of the country’s technological scene which was at the time embracing the mobile money revolution in 2010 when he announced that he had developed a technology to secure mobile and internet banking, e-commerce and e-government.

Mwale told this paper during one of his short visits in the country in 2010 how his home in New York had been a shack for about a year until his asylum application was approved.

With word on his innovation getting into US technology circles, he says he was enrolled as a special admit at Columbia University for masters in Electrical engineering in 2003.

His name does not however come up on the site of the university that lists its current and former students.  At Columbia, Mwale said his technology attracted faculty approval from an unnamed technology researcher.

He said he raised the initial Sh200 million ($2 million) required to roll-out the technology dubbed Data Aggregation Timer Enabled Console. When he came to market the technology in Kenya, Mwale promised those would buy a stake in his firm that it would transform the mobile sector.

At the time, he claimed that his firm was targeting revenues of Sh100 billion and had guaranteed revenues at least Sh1billion annually to be shared among the investors. 

During that visit, he said he was hoping to raise Sh70 billion ($700 million) by selling a 10 per cent stake in his company through the American stock exchange, NASDAQ. And buyers had a very limited time to buy into SBA Technologies Inc.  

As he departed Nairobi for New York to set in motion the listing of his company, he left behind a telling sign.

While on one of his Nairobi tours, Mwale booked in Nairobi’s Norfolk Hotel.

And as he chased after his NASDAQ dream, he left an unpaid bill of Sh3.4 million. There were no other details on the NASDAQ listing. Neither on the investors. The Sunday Standard has spoken to multiple sources who have dealt with the businessman in Kenya and abroad, whose testimonies continue to chip at the man’s armour. 

“In New York, Mwale boasted to me how rich he was. He told me he owned a private jet. We met at the Trump Towers apartments, where he said owned a home. He also took me to his other alleged luxury homes in Florida at Fort Lauderdale and Cape Coral,” a source who provided email evidence and bank statements to prove his dealings with the investor said.

He also said took visitors to other high-end residences in New Jersey.  

His American wife, Kaila Knox was the host extraordinaire.  In some of the captions, Kaila is seen hosting former US president Barrack Obama. There is another photo of her, addressing a dinner for the members of the American Chamber of Commerce in August 2014. In attendance was former Nigerian President Jonathan Goodluck.

Their company, SBA Technologies sponsored the dinner. Also in the US, the Mwale’s started the American Institute for African Development (AIAD), another avenue to advance their interests. SBA Technologies also was one of the sponsors of a presidential luncheon organised by the Corporate Council on Africa in September 2014, held at the Grand Hyatt Hotel in New York. The luncheon was attended by President Uhuru Kenyatta.

“I made the point of checking out his SBA technologies office along Park Avenue. I was disappointed to find out it was a fake address,” another source said.

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