Former Attorney-General Githu Muigai used a proxy to buy 16 apartments in Nairobi’s Ngong Road through a botched auction deal.
Prof Muigai is now seeking a refund of Sh100.5 million from a bank that auctioned the properties two years ago in a suit that threatens to reveal secret financial dealings of the former chief government legal adviser.
The former Attorney-General says in court papers that he conducted 16 bids for the apartments through a proxy named Koome Kiragu.
Now, Prof Githu, through his trading company Fairlake Estate, is seeking to terminate the auction deal, arguing that the bank has failed to offer him documents for ownership of the homes.
The bank has told the court that Prof Muigai was offered the ownership documents, including the original title deed and leases on September 29, 2020, and asked Justice Wilfrida Okwany not to reverse the auction deal.
“The bank can not be blamed if the plaintiff has not taken possession of the apartments. The plaintiff understands the process of taking over possession of the units it purchased and should use the legal options available to it to take the apartments,” says the bank through Walker Kontos Advocates.
The property was previously the subject of a separate court case where the tenants opposed the auctions, arguing they had bought the property from the developer.
The developer has tapped a mortgage but failed to pay back the bank after selling some of the apartments.
The High Court dismissed the suit, setting the stage for the bank to auction the apartments to Prof Githu.
“Due to the bank’s inability to deliver clean title for the properties and possession to Fairlake Estates Ltd, the auction sales stand rescinded by the conduct of the bank,” says Prof Muigai through his advocate, Mohammed Nyaoga.
The bank has opposed the termination of the sale deal and return of the Sh100.5 million, saying it has not breached any terms or conditions of sale and that Prof Muigai has already been furnished with documents to ease transfer of the property.
Prof Muigai filed the case at the High Court in Milimani after claiming he was denied access to the housing units at Zahara Gardens, Ngong Road.
The houses were auctioned in May 2020 after the previous owner defaulted on a loan.
Prof Muigai was represented by Mr Koome, a businessman who emerged as the highest bidder.
In his court papers, Prof Muigai argues that the bank breached the sale contract by failing to furnish him with the transaction’s Completion Notice within 90 days, as provided for in the agreement, to enable him take control of the property.
He wants the court to order a refund of the Sh100.5 million and reversal of the auction
He says the bank was supposed to give him the documents within 90 days upon payment of the first auction price on August 24, 2020.
Court papers indicate that he first purchased 14 housing units in May 2020 and the transaction was supposed to be completed on August 24, 2020. He purchased another two units in December 2020 and the completion date of the second transaction was March 14, 2021.
He further argues that the bank failed to provide all the completion documents for each specific apartment auctioned as a separate and distinct lot, a move he says is a repudiation of the auction.
“At the time of auction and to date, Fairlake Estate Limited is unable to take possession of the auction property as it has been repeatedly denied access to the property,” says Prof Muigai in the court papers.
He adds that the bank is also yet to create sub-leases for the units and that titles for the individual units are not available despite the bank having auctioned the apartments as separate lots.
Prof Muigai says he became aware of multiple suits filed by aggrieved parties over the auction of the properties between May and June 2021.
“Attempts of seeking particulars and progress of the suits from the bank have been met with obfuscation that renders it impossible to determine the bank’s ability to perform its contractual obligation not only to Fairlake but to any third parties,” the court papers indicate.
The case will be heard on June 22.