Karume's children win battle to eject trustees from managing his Sh40b estate

The High Court has allowed an application by three children of late tycoon Njenga Karume to remove some trustees he appointed to manage his multi-billion-shilling empire.

Lady Justice Roseline Aburili ordered the removal of George Waireri, Kung’u Gatabaki and Margaret Kamithi as trustees of the Njenga Karume Trust ruling that their continued stay was untenable after falling out with the three children, Albert Kigera, Samuel Wanjema and Lucy Wanjiru.

According to the judge, mistrust between the trustees and some beneficiaries rendered it impossible for the Trust to be managed in the manner envisaged by the late Karume (pictured) in taking care of his estate estimated to be worth Sh40 billion. She, however, found that there was no evidence of financial impropriety by the Trustees and ordered they give an account of all transactions undertaken since Karume’s demise in February 2012.

She also declined to disband the Njenga Karume Trust as demanded by the children who want the estate distributed to each of them and gave Iseme, Kamau and Maema (IKM) law firm authority to oversee the exit and appointment of new trustees.

“I direct Mr James Kamau of IKM to supervise the exit process for the removed trustees and in accordance with the trust deed, IKM shall undertake the process of nominating the persons to fill the vacancies while taking into account that the NKT chairman is not a beneficiary,” ruled Justice Aburili.

She faulted the trustees for failing to keep the beneficiaries fully informed of their activities, a situation she found had contributed to deterioration of relations between them and Karume’s children. She added that the trust deed had sufficient mechanism for replacement of trustees and ordered that new trustees be appointed in the manner provided in the trust deed.

The three siblings have been in a protracted court battle with the trustees and executors of his will since Karume’s death in 2012 over management of the multi-billion shillings businesses in real estate, agriculture, transport and hotel industry.

They wanted a new team appointed claiming they had lost trust and confidence in the way the trustees were managing the estates and accused them of operating in an opaque manner, neglecting the beneficiaries, failing to account for expenditure and wasting the estate.

Justice Aburili agreed with their claims, ruling that they failed to run the Trust diligently and failed to brief the beneficiaries regularly on status of the estate.

“The trustees had an obligation to exercise diligence in execution of their duties under the Trust and which diligence was expected to be that which a man of ordinary prudence would exercise in the management of his own private affairs but they failed to do so,” she ruled.

She ruled that after Karume’s death, the trustees discriminated against some of the beneficiaries by refusing to pay them Sh200,000 monthly allowances and dishonestly allocating some properties themselves without prove of purchase.