How taxpayers lost Sh180m in former VP Murumbi land sale

Trusted Society of Human rights Alliance Chairperson Elijah Sikona (right) and his secretary George Ole Narok addressing the press in Nakuru on October 3, 2019. [ Kipsang Joseph, Standard]

The State lost Sh180 million in the former Vice President Joseph Murumbi expansive land deal involving the Agricultural Finance Corporation (AFC) and a company allegedly linked to Deputy President William Ruto. 

This is according to documents sent by Trusted Society of Human Rights Alliance to investigative agencies among them the Ethics and Anti-Corruption Commission (EACC), Directorate of Criminal Investigations (DCI) and that of Office of the Director of Public Prosecutions (DPP).

The human rights lobby claims AFC undervalued the parcel of land, single-sourced a buyer and hurriedly disposed of the property even as the late Murumbi’s family sought to settle a loan he had taken using the 976 acres as collateral.

Sale agreements and other documents produced in court by Murumbi’s family in a suit they lost against AFC, whose copies have been sent to the investigators, indicate that the land was sold at Sh65,000 per acre.

“The AFC offered to sell the subject property to North Morgor Holdings at Sh63,440,000 which translates to Sh65,000 per acre,” reads part of the letter.

The lobby group chairman Elijah Sikona, however, claims that the September 2015 deal between AFC and North Morgor Holdings was suspect since the property was undeniably undervalued.

Valuation papers

“I am also a resident of the area and by 2015 an acre of land was valued at Sh250,000. Today, land prices in the same area average Sh800,000 per acre. Thus the State lost Sh185,000 in every acre sold, translating to Sh180,560,000,” Sikona said.

On this, the lobby group wants the investigative agencies to compel the AFC management to produce land valuation documents that were used in the deal. The group also wants the Public Accounts Committee to probe whether the full amount of Sh63 million which was to be cleared within 90 days was actually paid and to which accounts it was deposited.

Sh15,860,000 was to be paid as down payment while the remaining Sh47m was to be cleared within three months. In our findings, only Sh634,400 paid in November 2015 as stamp duty through Chase Bank can be verified to have gone to the government. The rest might have gone into individual’s accounts,” Sinkona said.

Sinkona further wants AFC management quizzed on whether they advertised sale of the land and the involvement of an auctioneer during the process as required under the Public Property Procurement and Disposal Act.

“They should answer what the exact amount of loan balance and interest was at the time they transferred the property, why it was never advertised for sale in the local dailies and why they single-sourced a buyer instead of competitive bidding which would have brought more money and make it more transparent,” Sinkona said.

In the letter, the group further says AFC did not involve the National Lands Commission saying that the parcel had been rendered public property.

“With all these discrepancies, it is clear that the AFC Managing Director conspired with the Directors of North Morgor Holdings, an entity started with the intention of undertaking the transaction,” Sinkona wrote.

They also want AFC questioned on why Murumbi’s case was treated differently seeing that it had written off other defaulted loans taken during the same period. The group wants the process of asset recovery started and those involved prosecuted.