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Moi-era MP fights KPCU over Nairobi building rent deal

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Economy

Moi-era MP fights KPCU over Nairobi building rent deal


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Wakulima House. FILE PHOTO | NMG

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Summary

  • In his application, the politician turned-businessman claimed that he first leased the building in 2015 and was planning to transform the facility—which also houses coffee mills — into a business centre.
  • He said the lease was later extended in 2018 but New KPCU Company Ltd refused to hand over to him the agreed portion of the building estimated to be 187,000 square metres.
  • Mr Ahmed further claimed that his company Woolwich Properties (K) Ltd had obtained Sh646million funding, part of which had already been invested in the refurbishment of the building.

A Moi-era Member of Parliament has suffered a setback in his bid to take over part of the iconic State-owned Wakulima House in downtown Nairobi on lease terms.

High Court judge John Mativo Wednesday dismissed an application by Arale Hassan Ahmed, a former MP for Wajir South Constituency, seeking to enforce a lease agreement signed with the defunct Kenya Planters Co-operative Union (KPCU), now New KPCU, to run businesses in part of the building on Haile Selassie Avenue.

In his application, the politician turned-businessman claimed that he first leased the building in 2015 and was planning to transform the facility—which also houses coffee mills — into a business centre.

He said the lease was later extended in 2018 but New KPCU Company Ltd refused to hand over to him the agreed portion of the building estimated to be 187,000 square metres.

Mr Ahmed further claimed that his company Woolwich Properties (K) Ltd had obtained Sh646million funding, part of which had already been invested in the refurbishment of the building.

The former Kanu MP also said third parties had invested Sh250 million in the project and urged the court to intervene and stop New KPCU from breaching the lease contract which was allegedly extended in 2018 for a period of 25 years with a grace period of two years following negotiations.

In response to the businessman’s application, New KPCU Company, however, said the businessman did not have consent to transform the building into “an ultra-modern city”.

The company’s acting manager, Angeline Ndambuki, said the Finance ministry had prohibited any developments near the railway line—which passed adjacent to the hind side of the building.

She further said there were no board minutes to support the alleged lease agreement and that the new management was not aware of the contract because New KPCU Company was not in existence in 2018 when the agreement was signed.

Ms Ndambuki also claimed that the businessman was not paying rent despite having leased and rented the premises to other persons.

From the schedule of creditors, he has an outstanding debt of Sh90 million, which amount KPCU liquidators are yet to recover.

Ms Ndambuki told the court that with the appointment of the liquidator, all engagements, undertakings and dealings with the assets of the KPCU Ltd were stopped unless with the express consent and permission of the liquidator.

While dismissing the former MP’s application, Justice Mativo said Woolwich Properties (K) Ltd, failed to justify its quest for an injunction to compel the New KPCU from implementing the lease or signing similar deals with other parties.

“The facts before me do not satisfy the tests for granting a mandatory injunction. Similarly, the applicant has not demonstrated a prima facie case with a likelihood of success,” the judge said.

Justice Mativo further said the businessman did not stand a risk of losing his investment should he successfully sue New KPCU for breach of contract.

“It has not been shown that there is a real risk that the loss may never be recovered. Differently put, the applicant’s claim can be compensated by way of damages, hence it cannot suffer irreparable harm,” the Judge said.

The Wakulima House building g currently attracts a monthly rent of Sh60 per square feet and a service charge of Sh20 per square feet.



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