Thousands of gullible investors have been duped into get-rich-quick agribusiness schemes that have turned into mega frauds where they lost billions.
Many families have fallen victim to make-believe schemes of delivering long-term returns from 'small investments' that would be directed to lucrative ventures such as growing tomatoes.
In all cases reviewed by The Standard, cunning proponents, in hindsight, were really never about commercial farming. That was a brilliant approach to sell swathes of land that would otherwise never find buyers.
Nothing to show
- 1 Activists put under arrest as they protest funds' theft
- 2 New park soon to open in Nairobi
- 3 Standard, Safaricom in pact to sell digital newspapers
- 4 Kanu: We formalised relationship with Jubilee, eyeing next level
In worse scenarios, some victims end up with nothing to show for their investment, apart from contracts that are not worth the paper they are printed on, including leases for plots.
As it has turned out, many of the “smart farmers” who believed the fake narrative that they would make a fortune without dirtying their hands are left servicing hefty bank loans while the swindlers are probably holidaying in the Maldives.
From PRC to Diamond Properties, and now Goldenscape Greenhouses, the script has remained exactly the same and ends in tears for all investors.
Often only one installment of promised returns is paid out to the early birds, which is intended to be a bait to persuade doubting Thomases about authenticity of the investment plan.
Social media platforms have complemented conventional information platforms to push the fraudsters where events like testimonies and payment of dividends, whether real or fake, are played up.
Faith M, as she requested to be identified, was scouting for an investment opportunity to secure the future of her two children – one in university and the other sitting Form Four national examinations later this year.
Learning her employer struggled to stay in business and had offered voluntary early retirement, investing in smart farming looked ideal.
From her years of service, she took Sh760,000 severance pay early last year and entrusted it with Peter Wangai’s company, which promised to construct two greenhouses and grow any crop as the firm deemed fit.
“I never quite got to travel to the farms in Laikipia, even though there were tours organised by the company. Maybe I should have,” Faith shared her story with The Standard.
In June last year, she was handed a cheque of Sh550,000 as the first installment of her returns from the two greenhouses. On seeing this was a 'viable business', she reinvested in a third smart farm.
In December, another cheque of Sh550,000 was issued, but it bounced. The bank informed her that the paying account did not have any funds.
Excuses started coming from the company on why the cheques had bounced, with Wangai pleading for another three months to honour the promised payouts.
Instead, everything went quiet for a company whose social media presence was awash with updates and testimonials, which had previously helped to lure more investors.
Such was the story of Ahmed Abdiry, who remembers the day in March last year when he chanced upon a vibrant discussion on a Facebook page about how people were raking in huge profits without breaking a sweat.
All a willing investor was required to do was raise Sh380,000, which was sufficient to purchase a greenhouse, where their choice of high-yielding crop would be grown.
“I was hesitant at first and decided to follow the events on the page for a month, until I viewed the company handing over cheques to investors. Then I jumped in, though cautiously,” Abdiry narrates.
He was asked to deliver the bank-in slip of his investment at the company office in Lower Kabete, Nairobi, some 280km from his home in Isiolo. He promptly did. This document would be required in entering a contract with the company.
Goldenscape promised a return of Sh550,000 in the first year, Sh370,000 in the second and third years – all payable semi-annually.
He was not required to view the farm or the greenhouse he had just paid for.
In October, his instinct was vindicated when he received a notification that Sh275,000 had been wired into his account and he could not stop congratulating himself for his supposed moment of brilliance six months earlier.
To top it all, he reinvested the amount in yet another greenhouse with the help of a friend, who topped up his dividend with Sh105,000.
Abdiry is still hopeful that his next installment due in April will come, but the tears in a WhatsApp group of fellow investors whose payments are several months late, have left him in jitters.
Promised dates for receiving payments vary depending on the time an investor joins, with the first installment expected after six months.
One cohort of investors had been promised that payments would be wired in December, before the firm sought three months' extension to sort out some matters.
But when the later date dawned, all the office lines went quite and this stoked a wave of panic, with some reporting the matter to the police.
Rosemary Wabala is among the investors who cannot pinch herself enough after passively leading her husband of a year to invest Sh3 million in the farming prospect.
She had joined earlier last year, investing the required Sh380,000 before earning the promised return for the first year, some Sh550,000.
It was good business, as she is due to earn returns for the second and third year, even though she has already recouped her initial investment.
“I am the reason he put his money in this business,” she said, adding that she would be fine recouping her husband’s initial investment alone.
With the prospect of making even more profits, Wabala says her husband diverted the money they had saved to buy a family car into the smart farming business last May.
However, the returns expected in December never came, as the cheque received could not be honoured by his bank.
Goldenscape officials sought more time to ensure their accounts were funded, supposedly from money that would be sourced from abroad. A revised payment date of February 29 was given, but the bounced cheque was enough to drive the family to the edge.
Come the last Saturday of February, the agreed date, no funds were in the accounts, informing the decision by Wabala, her husband, as part of a group of 53, to report the matter to Directorate of Criminal Investigations (DCI).
Officials from the DCI have confirmed that they have taken up the matter, specifically on the issuance of bouncing cheques, which is a criminal offence under Kenyan law.
All efforts to find Wangai on his known telephone numbers since last Thursday have been futile, as the calls have not been going through. Neither have text messages been responded to.
Here are some other verbatim accounts of some investors (only corrected for spelling errors).
Peter Maindi: “I really regret why I gave a testimony, which was uploaded to YouTube...it has made my life totally complicated. Friends and colleagues who invested after watching it are almost swallowing me.”
Mghoike: “My first return on investment was in January, and for the second greenhouse was end of this March. I am very broke I don't know what to do. I stopped working in 2016, then took part of my pension and invested in Goldenscape. They have my Sh810,000. If I can only get my capital, I will just put it in money market and learn a lesson. I didn't retire but had to resign because I was sick and couldn't work. I also take medication daily, which I buy monthly."
Zippy: “I'm also going through the same; (I) invested my pension, my first ever investment. I'm so broke... (I) had borrowed money from friends and promised to return soon. (I) don't know what to think. I'm in so much pain.”
Goldenscape’s story of promising investors huge returns, before paying the first few investors and aggressively selling the narrative in the media to buy public confidence, has played out before.
A UAE based Charles Kamau parted with Sh3 million, which he invested in Diamond Properties in 2017 and got zero returns. He shared the sentiment with an investment group identified as Jedex, which paid Sh900,000 for two plots and an additional Sh580,000 for two greenhouses.
Predictably, the group of 12 was only left with the plots, whose ownership is not even guaranteed, as the original owner has contested ever selling it to Diamond Properties.
Eric Kithuka, another Kenyan working in Saudi Arabia, invested in a plot and a greenhouse before harvesting nil returns.
Close by to the Diamond Properties farms in Kajiado, a Nairobi-based firm commonly identified by its initials PRC, took smart farmers on a similar ride.
Hundreds bought plots and greenhouses that would be managed by the firm, but the story ended in huge disappointments for everyone.