President Uhuru's cousin losses 433 acre land case against KCB

President Uhuru Kenyatta’s cousin Ngengi Muigai has lost an appeal seeking to block Kenya Commercial Bank from auctioning 443 acres of land he used as security for a loan 29 years ago.

After a plethora of suits numbering at least 14 in a bid to salvage the land worth Sh3 billion, Mr Muigai and his firm Benjoh walked away with nothing.

Court of Appeal judges Roselyn Nambuye, Asike Makhandia and Kathurima M’inoti unanimously agreed that KCB had a right to sell the property and that the suits against it were meant to address the same issue that had been settled by the court.

Defaulted in repayment

“Benjoh cannot therefore argue that KCB exercised its right of sale over the wrong property. The said property had been charged to secure the loan and was sold upon default. In our view, it was within KCB’s right to choose upon which property to exercise its rights over,” the judges ruled.

Ngengi, through Benjoh, has pursued almost all possible legal avenues and employed tremendous legal ingenuity and sophistry, with his cases even ending up at the Supreme Court.

Sometime in 1988, the United States International Development (USAid) offered funds by way of loans to Kenyans under the Rural Projects Enterprise Programme to be administered by, among others, KCB.

Benjoh applied for a Sh18,675,000 loan through KCB to start a flower export business.

Following a feasibility study, KCB recommended the project and in 1989, granted Benjoh the loan facility secured by the 443-acre piece of land.

The guarantor of the loan was Muiri Coffee Ltd, also owned by Ngengi.

Ngengi defaulted in the repayment of the loan, which prompted the bank to order for auction the contested property at Sh13.1 million. On May 4, 1992, the lender agreed to halt the auction as Benjoh admitted its indebtedness and undertook to repay the loan in three months. It, however, did not honour its end of the bargain, forcing the bank to seek to auction the land on January 23, the following year. Benjoh went back to court and stopped the auction.

Undeterred, the lender again scheduled another auction on June 26, 1996, but Muiri this time filed another suit against Benjoh and KCB. The case was dismissed based on the belief that the land had already been sold.

Another auction was set for 1997 and again, Benjoh rushed to court a day before the auction and obtained orders blocking it. It also revived the initial case filed in 1992 which had been settled through consent that KCB would not sell the land to allow the firm settle its debt. Benjoh wanted the court to set aside the consent orders and at the same time order KCB to release the title as its records did not allegedly show any debt. It lost the case.

The battle between the firm and KCB turned to two constitutional cases in which Benjoh complained that its loan account had been fraudulently operated. It sought to compel the Director of Criminal Investigations to institute investigations.

In the second case, Muiri complained that the auction was against his right to property. It asked the court to declare the auction unconstitutional and order that the titles be returned.

Despite all the legal battles, KCB eventually on September 19, 2007 sold the property to Bidii Ltd for Sh70 million. Benjoh and Muiri filed yet another suit against the lender and the new owner in a bid to nullify the sale.

After a year of legal battle, the case was again dismissed but the judge ordered KCB to furnish Benjoh with statements showing how the debt had accrued in order to bring the legal battles to an end. That did not happen.

Benjoh again went to court questioning the advanced loan and statements although they had been raised in the previous suits.

In this suit, the firm sought a declaration that KCB breached the contract and sought to be paid Sh2,243,067,494 as damages. KCB, through lawyers Issa Mansour and Philip Nyachoti, asked the court to dismiss the case but Benjoh filed a counter suit seeking to strike out the defence.

The Court of Appeal subsequently dismissed the counter claim as it did not prove that it had served KCB with the court papers.