Man pleads fight to get back leased property

Esrom Ngugi, a member of Muguga Investment Company testifies at a Milimani Court. [George Njunge: Standard]

An 87-year-old man is battling to wrestle a multi-million-shilling property from his kin who leased it out without consent.

Esrom Ngugi Maringa yesterday told Justice Francis Gikonyo there was an attempt to short-change stakeholders who had come together to form an investment group for the sake of their children.

Mr Ngugi told the court he did not understand how seven people appointed to manage their investments turned against them and went against the wishes of shareholders even after being voted out as directors.

“It is not fair that an investment we put up from scratch is being given to someone who will be collecting Sh5 million monthly rent and giving us a token of Sh1 million,” said Ngugi.

Illegal lease

At the centre of the dispute is a five-storey commercial building in Eastleigh estimated to be worth Sh500 million, which Ngugi said was illegally leased to Nuni General Trading Ltd without their knowledge.

Ngugi accused Nicholas Kabucho, Joe Gathu, Joseph Karanja, Paul Kinuthia, Francis Kagwe, Erastus Gathage and David Muroki of illegally leasing out the property without the knowledge of the owners.

According to Ngugi, 34 families banded together in May 1974 and formed Muguga Investment Company Ltd for purposes of investing for future generations.

Over the years, and due to their advanced age, they passed the company’s leadership to their dependents who were elected as directors to run the company’s affairs and share profits with all beneficiaries.

He stated that all was well until November 2014 when the seven directors leased the Eastleigh property for 25 years.

Under the lease, Nuni General Trading Ltd was to bring down the old commercial building and construct a new one.

But Ngugi stated that the building did not need to be demolished since they had the capacity to renovate it to new standards. “We cannot accept such a thing like demolishing our property as proposed under the lease. They are trying to entice us with a Sh30 million guarantee, which is peanuts compared to the value of our property,” he said.

Ngugi, who testified on behalf of all shareholders, said they resolved to vote out the seven directors after learning about the lease plan.

Asked whether the meeting they held to oust the directors was illegal, Ngugi responded that they did so in accordance with a Court of Appeal order that directed them to hold a special meeting to resolve the leadership dispute.

Ulterior motives

He maintained that their company has only 34 shareholders and accused the Registrar of Companies of arbitrarily increasing the number to 66 “for ulterior motives”.

“We called a special general meeting on December 14, 2014 and resolved to vote them out. They are aware that the beneficiaries and shareholders were against the lease. That’s why we want it cancelled and our property returned to us,” he said.

According to Ngugi, Nuni General Trading Ltd is a stranger to the shareholders, saying that they only know the tenants who have been paying a total of Sh640,000 rent every month.

He said because the seven directors had deliberately decided to do the wrong thing, the shareholders had a right to demand their property back.

Ngugi said he had tried to have the dispute resolved amicably, but the directors refused to budge, forcing the stakeholders to seek court intervention. The hearing continues on March 4.