Kalonzo caught up in Sh23m city prime property dispute

Former Vice-President Kalonzo Musyoka. He has been sucked into a court dispute involving the sale of a prime property belonging to a youth organisation where he previously served as patron.  NATION MEDIA GROUP

By BENSON WAMBUGU benwambugu62@gmail.com, Saturday, June 1  2013 

In Summary

• Desiral Company Ltd, a firm associated with Mr Musyoka, has sued two trustees of the Kenya Youth Hostels Association accusing them of fraudulently obtaining a deposit of Sh23 million towards the purchase of a four-storey building along Ralph Bunche Road near Nairobi Hospital.

Former Vice-President Kalonzo Musyoka has been sucked into a court dispute involving the sale of a prime property belonging to a youth organisation where he previously served as patron.

Desiral Company Ltd, a firm associated with Mr Musyoka, has sued two trustees of the Kenya Youth Hostels Association accusing them of fraudulently obtaining a deposit of Sh23 million towards the purchase of a four-storey building along Ralph Bunche Road near Nairobi Hospital.

Desiral, through a director, Ms Jane Muasya, claims Kenya Youth trustees, Mr Mutavi Maseki and Mr Livingstone Sane, deliberately concealed that they had entered into a separate agreement with Superiorfone Communications who subsequently bought the property.

Ms Muasya argues that Desiral had committed to buy the property for Sh130 million and had deposited Sh23 million in the Kenya Youth bank account and was ready to clear the balance of Sh107 million.

The former Vice-President served as Kenya Youth’s patron until three years ago when he was voted out for failure to attend annual general meetings, according to court documents.

Desiral, through Musyoka Wambua and Katiku Advocates, is seeking a permanent injunction restraining Superiorfone from paying the balance of the purchase price to the trustees, arguing that if the whole amount is paid, the firm is likely to lose its deposited sum.

However, Mr Maseki has countered claims that Mr Musyoka deposited the money in the Kenya Youth account to buy the property. The trustee said the former VP used the association’s account as a political slush fund to launder money for his campaigns in the last General Election. Mr Musyoka was a running mate to unsuccessful presidential contender Raila Odinga.

Entirely withdrawn

Mr Maseki said in his sworn affidavit lodged in court on May 27 that the Sh23 million credited in the Kenya Youth account by Mr Musyoka and Mr Gideon Mutemi Mulyungi, the Public Works permanent secretary, was entirely withdrawn by the association’s treasurer Andrew Kwale and manager Ignatius Mutua and handed over to the former Vice-President for his 2013 political campaigns.

“Mr Musyoka never intended to pay any money towards the purchase of the property as he was aware that Kenya Youth was allowed to sell the property within three months between April and June 2012 with the approval of Kaplan & Stratton Advocates and which approval he never sought,” said Mr Maseki.

The two trustees claimed the purported sale agreement alleged to have been executed by them to sell the property to Desiral was a forgery executed by Desiral’s advocate John Katiku, a partner in the law firm of Musyoka, Wambua and Katiku. The former VP is a consulting partner in the company.

Consequently, the trustees through their lawyers Bryant and Associates have lodged a complaint to the Director of Public Prosecutions Keriako Tobiko regarding the alleged forged sale agreement and claiming abuse of police investigation powers.

Caused to be uttered

“Our specific complaint is in regard to the lawyer acting for Desiral, Mr John Katiku, who uttered or caused to be uttered a forged document which contains the forged signatures of our clients, Mr Maseki and Mr Sane,” reads part of the letter seen by the Sunday Nation.

“It would appear our clients are justified in seeking intervention of your office in this matter because it seems that unknown forces are attempting to use the police to arrest our clients solely on the basis of a forged sale agreement,” the complainants say.

“It would serve no purpose to report the forgery to the police since they have already decided to launch an investigation on the alleged forged sale agreement. But what we are asking is why police are not questioning Mr Katiku and the Desiral directors, both real and apparent,” read the two-page letter to Mr Tobiko dated May 9.

Desiral suffered yet another setback after two Kenya Youth management staff jointly named in the suit as plaintiffs against their two trustees and Superiorfone Communications, opted out.
Mr Kwale and Mr Mutua withdrew their support for Desiral and recanted the allegations they had made against their trustees regarding the purported sale agreement.

They jointly claimed that they had been intimidated by Mr Musyoka and his advocate Mr Katiku into joining the case after being taken to police and threatened to make unlawful pleadings in the suit.
The duo said they took the earliest opportunity to opt out of the case by lodging in court a notice of discontinuance of the suit.

They also ceased to be represented by the law firm of Musyoka, Wambua and Katiku and have appointed Mochere and Company Advocates to act for them.

Desiral had banked heavily on the two Kenya Youth staff to prosecute their case as they had alleged in their sworn affidavits that the trustees had indeed entered into an agreement with Desiral to sell the multi-million-shilling property.

Kenya Youth property was to be sold by the International Youth Hostelling Federation in part to recover a loan of $400,000 (Sh34 million) it had granted its local affiliate. Kenya Youth is a non-profit membership organisation.

When the case came up for mention before Justice Jonathan Havelock (above) on May 27, the parties were directed to return to court on June 11 to prosecute their respective applications.