Kedong Ranch, the SGR bonanza and the battle for Naivasha dry port billions
The multi-billion shilling rush for properties in the Kedong Valley has been brutal. It was vicious and had all the elements of swordsmen making a claim.
For starters, it’s the controversial land where the Standard Gauge Railway (SGR) ends. There was to be a dry port – and a trading center was beginning to emerge.
The commercial plots around the dry port — and on the way to the SGR — were quickly taken.
A three-star hotel was built nearby. Commercial houses began to spring up like mushrooms. In short, Kedong has become the valley of speculators, opportunists, wheel dealers and brokers. You could easily make money, get killed or cheated.
Thanks to the dry port, the sleepy neighboring towns of Mai Mahiu and Naivasha got a new boost.
Read also: Kenya’s new decision on SGR will upset China and Uganda
Freight trains carrying containers to the edge of “nowhere” – as SGR critics dismissively described UhuRuto’s pet project – were now turning the windy plains into an inland port where locally bound and exported goods would be picked up.
In 1900, Nairobi had grown out of such a railway depot – and some investors saw Kedong as the next big thing.
So they lined up to make an early landing – the same way people like Alibhai Jevanjee and Ewart Grogan made money in Nairobi during British colonial times.
The only difference is that Kedong’s investments will end in tears. It could be the tail of a white elephant.
With President William Ruto ordering dry port operations out of the Longonot Plains and back to Mombasa, the SGR depot is virtually dead if the directive is fully implemented – just like the dream of the Kedong Valley.
Former Kenya Ports Authority Managing Director, Daniel Manduku, now ODM MP for Nyaribari Masaba, said: without the freight aspect, the SGR will have to dip into national treasury revenue to pay its invoice.
Essentially, we have a new white elephant in town to maintain – in addition to the struggling KQ.
Without a dynamic dry port, the Kedong story ends before it begins. But it does give some insight into how buccaneers work.
Kedong Ranch has a long history since the eviction of the Maasai by Gabriel Colvile – who then registered the vast land under Colvile Limited in the early years of Kenyan settlement.
Beneath Colvile, Kedong teemed with wild animals and cattle. With over 25,000 herds, Colvile was described as one of the most successful breeders of his generation – however, in James Fox ‘White Wickedness’, he is described as a man “dressed with remarkable thoroughness and … as the most boring man in the world”. Then he lost his wife Diana to his neighbor Lord Delamere.
After independence, the land was sold to new shareholders, including a Nyeri land purchase company whose members were from Muhoya and Tetu divisions, hence Muhotetu Farmers Limited.
They had also brought on board a group of power brokers from the Jomo Kenyatta era which included Nyandarua North MP JM Kariuki, Minister of Lands and Settlement Jackson Angaine and some members of the Kenyatta family.
For years, as commercial ranching collapsed, the land was under constant threat from the Maasai, who viewed the territory as ancestral land – and still demanded its restoration.
The main property rush is seen in what happened at Kedong Ranch, which is owned by Muhotetu Farmers Limited.
Court records show that in September 2013, a month after President Uhuru Kenyatta visited China and signed a $5 billion loan to build a 472.3 km railway line from Mombasa to Nairobi – and which was then to expand to Uganda, members of the giant Muhotetu Farmers Limited decided to sell its 181,250 shares of Kedong Ranch.
But this decision was not unanimous since some members filed a case requesting the appointment of a receiver-administrator and an injunction to stop the sale of the company’s shares.
The President Dejected
Meanwhile, on September 3, 2014, the company’s chairman, Imunyu Mwaniki – who supported the deal – was shot dead by “thieves” who raided his home.
Some shareholders believed the murder was related to the sale of Kedong shares.
In October in Kampala, three Northern Corridor Heads of State – Uganda, Rwanda and South Sudan – saw Uganda launch its SGR from Malaba to Kampala.
Kenya was represented by Eng Michael Kamau, the Cabinet Secretary for Transport and Infrastructure, while Ethiopian Prime Minister Hailemariam Desalegn sent a special envoy.
However, the requested injunction was rejected by a court in Nakuru on November 28, 2014, around the time Uganda launched its own SGR after completing the feasibility study and design of the railway line. iron.
If Uganda went ahead with its line, then the Kedong Valley was worth the speculators’ money. Interestingly, Muhotetu shareholders did not appeal. The death of the president, perhaps, had caused fear.
Before Mwaniki was killed, he told local media that the members had agreed to sell their stake in Kedong Ranch for 360 million shillings – a figure well below the amount that was later listed as payment.
In official documents, it is shown that Newell Holdings purchased the 181,250 shares of Muhotetu for 2.1 billion shillings in a transaction dated August 23, 2017.
With the SGR already launched and winding its way to Nairobi, and with East African nations interested in infrastructure, the dry port of Naivasha was a port of gold.
In October 2016, President Kenyatta launched construction of the second phase towards Naivasha and said the government had set aside billions of shillings to compensate owners.
With that, the battle for Kedong Ranch shares became a matter of life and death. On May 22, 2017, some of Muhotetu’s shareholders wrote a letter to the Registrar of Companies seeking to hold an extraordinary annual general meeting on August 5, 2017, to discuss the intended sale of Kedong shares.
They also protested the planned sale of shares in a letter dated June 2017 and called for a forensic audit of the company.
But before the annual general meeting could take place, some of the 30 members who had signed the notice of requisition or whose names appeared in the notice withdrew their signatures, forcing the Registrar of Companies to stop the general meeting. in a letter dated July 28, 2017.
Interestingly, the clerk copied the letter to the police and the county commissioner of Laikipia – where Muhotetu has an office.
Fee of 2.1 billion shillings
Three weeks later Muhotetu shares changed hands for 2.1 billion shillings, with William Munuhe Mwaniki signing on behalf of the farmers.
Protesting shareholders thought it was unprofitable. The timing of this sale came at a crucial time in SGR’s history.
This purchase was made three months after the 31 May 2017 launch of the Mombasa-Nairobi SGR by President Kenyatta and, as it emerged, Kenya Railways was putting up billions of shillings to compensate landowners for the Naivasha line.
For the Mombasa line, Kenya Railways had paid over 30 billion shillings, reflecting the exorbitant amount landowners were receiving.
For the Naivasha phase, the railway had given the National Land Commission some 17 billion shillings to pay in the first installment, which is why the shares of Kedong Ranch had become critical.
It also explains the capitalist rush for a piece of the Kedong Valley pie.
A month after Muhotetu parted ways with his shares and as officials asked members to go get their checks, two members, David John Nderitu and Joseph Wagura Ng’ang’a made a final attempt to stop the sale calling it fraudulent.
They claimed that their company had not held an annual general meeting for three consecutive years and that there were no audited accounts.
They also accused the Registrar of “open bias” in handling the Muhotetu case and asked for court intervention to stop the sale.
Finally, they accused the chairman of Muhotetu Farmers of having “conspired and maneuvered to frustrate the purpose of the said requisition by engaging in the fraudulent sale of the shares of the company”.
On August 23, 2017, a share transfer for 181,250 shares was made to Newell Holdings Limited, and the sale transfer was finalized on September 22, 2017.
Kedong Ranch Limited had asked all shareholders to waive their right of first refusal to allow the sale. But only the estate of the late Minister Angaine and the estate of JM Kariuki did not respond.
In Nakuru, in September 2018, Judge RE Aburili rejected a request by Muhotetu shareholders to stop the sale and argued that it had been approved by an annual general meeting.
Interestingly, it now appears that the AGM was organized by one of the factions. The court dismissed the other claims as “too wordy, too convoluted, and overloaded with several compulsive prayers of mandamus intended, ostensibly, to evade payment of court costs.”
Finally, it is the new shareholders who will receive compensation from SGR and the land where the dry port will be built.
But with President Ruto ordering that dry port functions be returned to Mombasa, some of the investors who thought Kedong would emerge as a town in the plains might rethink their bet.
Because, if the freight activity decreases, the losers will be the taxpayers because they have compensated for the unused land and the land players who have spent a fortune on Muhotetu shares.
Meanwhile, some locals say it was ancestral land, and during the campaign, President Ruto promised to solve the problem.
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