The families of former President Moi’s personal assistant Joshua Kulei and ex-Cabinet minister Simeon Nyachae are set to earn billions from construction deals under the government’s Big Four Agenda.
Their firms bagged contracts to put up 1,562 low-cost apartments in Nairobi County.
The Nation has established that three companies owned by members of the Kulei and Nyachae families are behind the redevelopment of Pangani estate under President Uhuru Kenyatta’s affordable housing section of the Big Four Agenda, through a joint venture.
The Pangani apartments are being put up through a public-private partnership between City Hall and companies owned by members of the two families.
Under the affordable housing project, county governments will provide land to private companies, which will build units and sell to Kenyans at subsidised rates.
The Pangani project will see 1,562 housing units replace the previous 48 on a 5.2-acre piece of land.
Sovereign Group Limited, Lee Construction and Tecnofin Kenya Limited bagged the Sh6.5 billion construction contract in 2016, when Dr Evans Kidero was still Nairobi governor.
But the project was absorbed into President Kenyatta’s Big Four Agenda one year later and after Dr Kidero’s exit from City Hall.
The contract indicates that the three companies will spend Sh6.5 billion to construct the apartments, which will be sold to Kenyans on a first come, first serve priority and at affordable prices.
Details of the companies and their construction project have emerged in a suit filed by law firm Robson Harris & Company Advocates, which is seeking Sh66 million from the three firms as compensation for consultancy done for the Pangani project.
Chepchirchir Sego, a Robson Harris advocate, says that the Kulei and Nyachae companies have refused to settle legal bills in respect to consultancy that was done between 2016 and 2018.
“The respondents have on several occasions acknowledged their indebtedness to Robson Harris & Company Advocates and despite Robson Harris & Company Advocates engaging them severally for purposes of making payment, they have engaged in a contour route of using every obstacle available to ignore/neglect and/or refuse to pay Robson Harris & Company Advocates their due and owing legal fees,” Ms Sego says in an affidavit.
Sovereign Group, Tecnofin and Lee Construction have hired MMC Asafo to oppose the legal fee.
Kenneth Wilson, representing the three companies, has asked the High Court to dismiss the fee claimed by Robson Harris on grounds that it was reached without properly adhering to the Advocates Remuneration Order – the guidebook used by lawyers to charge clients for services rendered.
Sovereign Group is at the centre of Mr Kulei’s vast business empire, which stretches across several industries in Kenya’s economy.
Much like most of Mr Kulei’s other companies, Sovereign Group’s official ownership is hidden behind a continuous loop that makes it difficult to know the individuals benefitting from billions banked by the firm’s several subsidiaries in different industries.
Records at the Registrar of Companies seen by the Nation indicate that Ruby Trust Limited owns 99.99 per cent of Sovereign Group Limited. A foreign company, Hallmark Holdings International, owns 0.01 per cent of Sovereign Group.
Ruby Trust is in turn half-owned by Sovereign Trust.
Evans Kiplimo Lagat, an advocate whose LinkedIn profile states he is Sovereign Group’s company secretary, owns the other 50 per cent of Ruby Trust.
A similar loop exists with Sian Enterprises and Trade World Kenya Limited – two companies co-owned by the Kulei family. Sian Enterprises and Trade World Kenya hold equal shares in Solio Construction, a company co-owned by the Moi and Kulei families.
Through Sovereign, Mr Kulei has laid claim to some companies under the Moi family empire, like logistics giant Siginon Group.
Curiously, several Moi and Kulei family businesses share a postal and physical address. Many of the two families list the ninth floor of Transnational Plaza in Nairobi’s Central Business District as their physical address, and Post Office Box 45675, Nairobi as their mailing station.
Joshua Kulei, who served as President Moi’s personal assistant, is listed as a director of Sovereign Group alongside his son Kennedy Kipruto Kulei.
Other directors are Caroline Jebet Kigen and former Uchumi Supermarkets managing director Julius Kipngetich.
Sovereign Group’s was registered on April 1, 1997 which indicates that Mr Kulei started consolidating his wealth under one company in the tail end of former President Moi’s 24-year reign.
Sources close to the Moi family have indicated that some of the shares the Kuleis claim to co-own with the former President have caused tension between the two families in the last 15 years.
The Mois believe that some of the shares registered to the Kuleis were held in trust for the former President’s children but not handed over as expected following Mwai Kibaki’s succession at the house on the hill, our sources added.
The interconnection between the two families’ businesses have made it difficult, even for their kin, to verify where the Mois start and the Kuleis end.
Lee Construction, one of the three companies in the Pangani project, is majority owned by Lee Karue Nyachae.
Mr Nyachae’s father, Simeon, served as a Cabinet minister under the Moi and Kibaki eras and built quite an enviable business empire of his own while in government. The senior Nyachae also represented Nyaribare Chache Constituency at the National Assembly between 1992 and 2007.
The junior Nyachae owns 127,500 shares of Lee Construction, giving him a 60 per cent stake in the firm. His Holburn Investments Limited owns the other 85,000 shares.
Mr Nyachae has been in the construction industry since 1995, through Lee Construction.
The firm has bagged several public and private contracts for construction of roads, dams, telecommunication towers and other infrastructure.
Both the Nyachae and Kulei families have a stake in Tecnofin Kenya Limited, the third firm involved in construction of the Pangani housing units.
Motorcycle Sports Federation Kenya chairman Renzo Bernardi is listed as a director alongside Mr Nyachae and Seth Bede Obiero.
Both the Kulei and Nyachae families own shares in Tecnofin Kenya Limited, the third firm involved in construction of the Pangani units.
Mr Kulei’s Sovereign Group Limited owns 140,250 shares in Tecnofin Kenya. Another company, Epialces Investments Limited owns a similar number of shares.
Through Lee Construction, Mr Nyachae owns 76,500 shares.
Dubai-based Tecnofin FCZO has a minority stake in the firm, with 3,000 shares.
Mr Nyachae, Mr Bernardi, Angolan national Antonio Henriques Da Silva, Robert Kanyi Muchoki and Mr Kulei’s son, Noah, are listed as Tecnofin directors.
The firm was incorporated on June 29, 2015.
Through Tecnofin, the Kuleis and Nyachaes have bagged other multibillion-shilling housing projects under the Big Four Agenda in Kitui and Mombasa Counties.
The Kuleis are likely to rake in a larger stake, as their Regent Management is set to manage the Pangani properties.
Regent has also been performing the role of sales agents for the Pangani houses.
At least 967 people have already paid deposits for various houses in the Pangani project.
The project will have 128 one-bedroom houses, 248 two-bedroom houses and 576 three-bedroom houses.
Another 610 luxurious duplexes will be sold at market rates to plug the financial hole created by subsidizing the one, two and three-bedroom apartments.
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