Karume kin act to save Sh17.5 billion empire from debt
By Wainaina Wambu | August 28th 2018
A three-year fight over the Sh17.5 billion empire left by former Cabinet minister Njenga Karume could end amicably.
The children of the former Defence minister and trustees have agreed to withdraw the court cases they had filed and split the wealth among the beneficiaries.
With creditors on their necks, Karume’s kin had to reach a compromise in order to pay Sh2.5 billion owed to the Kenya Revenue Authority (KRA), commercial banks, contractors and other creditors.
The parties will now liquidate some key assets of the estate, including the iconic Village Inn Hotel in Kiambu, to pay the debtors.
A mediation council has been set up with an in-tray of 50 tasks to complete. The council’s spokesperson is Stephen Karau, a former ambassador to the United Nations, who was also one of the executors of Karume’s will.
Karume had put his wealth under three holding companies to be managed by the Njenga Karume Trust, whose trustees have been tussling with his kin on the management of the estate.
Mr Karau dismissed claims that the estate was ailing and said that its current valuation “far outweighed” its debts.
One of the trustees, George Ngugi Waireri, also projected the image of a booming estate, with the mediation talks tipped to take a maximum of two months.
“When we look at the debt portfolio, we are thinking about Sh2.5 billion. That’s about 15 per cent of the value of the estate. That includes the value we owe KRA net all remissions we might get, banks, creditors and contractors over the past five years,” he said.
The properties to be sold include part of the 140-acre Kacharoba Tea Estate, Village Inn Hotel in Kiambu, 25 acres in Elementaita and seven acres in Muchatha, Kiambu County.
An advertisement weeks ago on the sale of some of Karume’s properties, including 11 parcels of land, had sparked a bitter tussle between kin and trustees, with the children saying they had not been informed.
“We have agreed on a retreat. It can be done in a month’s time. It might take longer, but we are very prepared for that,” said Karau.
He added that the estate being in the limelight for court battles had caused “distress” to trustees, executors and beneficiaries, thus the formation of the council.
The council comprises ‘10 generic families’ of Karume, trustees and executors who signed a ‘binding document’ in May 2018.
The lead mediator, the Rev Geoffery Njenga, said this was a cheap, quick and confidential process compared to bruising court battles.
Retired judge Lee Muthoga is part of the team and is being consulted on legal matters.
“Mediation takes care of the interests of the family members as opposed to litigation, which was only taking care of rights,” he said.
Jane Matu, Karume’s fifth born, said at first the family had not been keen on the calls for mediation after three years of court battles that had sharply split the members.
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