How plot to steal the Malili millions was conceived

Some time in mid-November 2008, a powerful cabinet minister at the time arranged a meeting at a classy hotel owned by an influential political family in Hurlingham area of Nairobi.

In attendance was a fellow cabinet colleague who lost out in the 2013 General Election and a permanent secretary.

The meeting was crucial as the Cabinet had earlier on approved a proposal to put up an ICT city, and land and location was needed.

The powerful minister came up with a suggestion that the issue of looking for land be handled by a private company. More meetings were to be held at the hotel and, subsequently, a company named Gateway Logistics was born under the leadership of the minister’s brother. It immediately embarked on the mission to look for an expansive piece of land. Their first stop was around Maanzoni area in Machakos, where they got attracted to a huge tract of land owned by a retired judge.

They did not agree on terms and conditions and the company moved eastward to land owned by the Malili Ranch Company.

Malili had, by 2007, completed the process of winding up its operations and sub-divided its huge parcel of land to shareholders. Before sub-division, the company had more land than Gateway was looking for.

MOVE TO CONSOLIDATE

Now that the parcels were in the hands of individual shareholders who had been given allotment letters, a way out had to be found.

Gateway directors reached out to Malili chairman, Mr Josiah Munuka, and floated the idea of buying the land as one piece. Mr Munuka was enthralled and, in future meetings at the Hurlingham hotel, agreed to help in consolidating the land for the ICT project.

Malili Ranch Company had seven directors at the time: Mr Munuka (chair), Mr Peter Kanyi (vice-chair), Mr Julius Kilonzo (secretary), Mr David Ndolo Ngilai, Mr James Munguti, Mr Julius Mbau and Mr Leonard Kitua.

In one of the meetings at Hurlingham, Mr Munuka promised Gateway that the company would get the 5,000 acres required for the project. He shared the same with three directors but left out another four.

The Malili directors did not disclose to their shareholders the intended plan by government to buy their land.

With the Malili directors agreeing to the deal, Gateway moved to sign a deal with Malili on February 24, 2009. In the agreement, Gateway, described as an agent, stated that it had identified and facilitated the purchase of the principal parcel of land measuring 5,000 acres. The agreement further said that on completion of the sale, the principal shall pay the agent Sh21,000 for each acre as agency fees.

In total, Gateway was to get Sh105 million for the job.

The directors and their cronies started the consolidation, buying back land from the shareholders, most of whom were paid between Sh300,000 and Sh500,000 for the 7.8 acres they each had got.

The buyers then moved in for the kill and sold the same to the government at Sh1.4 million per parcel. The Government had set aside Sh1 billion towards the land purchase and the first instalment of Sh400 million was released in June 2009.

Some of the affected shareholders were to come out later to say they had been duped, but since they had committed themselves legally, it was a done deal. A look at the payment schedule, where some 158 shareholders were paid, shows that three directors took the lion’s share of the cash  Mr Kanyi bagged Sh78,100,000, Mr Kilonzo Sh52,000,000 and Mr Munuka Sh37,500,000.

While they waited for the second payment, misfortune struck as Mr Munuka died mysteriously on September 3, 2009. Mr Kanyi, as vice-chair, took over the mantle.

With Sh600 million still to be paid, Mr Kanyi narrates how he immediately started receiving emissaries telling him how to handle the next payment. Twice, he says, soon after Mr Munuka’s burial, Machakos Senator Muthama called him twice for a meeting.

“Johnson Muthama told me to stop paying Sh1.4 million; he said I should pay less,” Mr Kanyi would later tell detectives detailed to investigate the case.

“Mr Kilonzo and I were summoned to the CID headquarters,” he says. Lawyer Eric Mutua went with them.

He says they were arrested on arrival and taken to Muthaiga police station. “The arresting officer told us our fate was sealed and he was under instruction to lock us up,” says Mr Kanyi.

While in the cells, the remaining four directors held a meeting at the company’s boardroom and replaced them with Mr David Ngilai, chairman, Mr James Munguti,  secretary, and Mr Leonard Kitua as treasurer.

PAYMENTS STOPPED

The new leaders decided that all future payments to members would be Sh1.1 million per parcel and not Sh1.4 million. They also agreed to pay E.K. Mutua & Co Advocates Sh28 million in legal fees. In the same meeting, they also decided to do away with Gateway Logistics, and pay the firm Sh40 million as final commission.

“No further payments shall to be made to Gateway Logistics ...” read minutes from the meeting.

Mr Kanyi and Mr Kilonzo would later be charged with stealing Sh142 million from the company. The case was, however, thrown out after the trial magistrate Gilbert Mutembei disagreed with the manner in which investigations had been conducted and action recommended against the CID officers involved in the investigation.

Later, as free men, Mr Kanyi and Kilonzo were one day called by the company advocate Mr Mutua and driven to Runda Estate where they met Mr Muthama, Mr Gideon Ndambuki, former Kibwezi MP Philip Kaloki and some armed men, likely bodyguards of the leaders present.

He was asked why he (together with Mr Kilonzo) had refused to agree to the resolution to pay Sh1.1 million per parcel. “They wanted that resolution to look unanimous. We agreed to sign. We were in a strange place, we were  scared of our lives,” says Mr Kanyi.

Asked whether he recalled meeting Mr Kanyi and Mr Kilonzo at Runda, Mr Ndambuki answered: “Yes.”

“Mr Muthama had asked to show me his house which was under construction. It was then that I met Mr Kanyi and Mr Kilonzo. I remember the issue of Malili was briefly discussed,” said Mr Ndambuki.

Afterwards, a new company, CCH Master Builders Africa, took over, although, to date, its role in the sale has not been fully established.