November 30, 2014 - Today's News In Gazetikenya

Trouble brewing in 

Karume’s multi-billion-shilling 

empire

INHERITANCE | Until the latest dispute, the late minister’s estate has been relatively stable despite its value and the number of beneficiaries involved

A mega property battle is brewing between some of the children of the late billionaire businessman and veteran politician Njenga Karume and members of the trust he formed to oversee his vast estate. The battle is exposing what has been described in court documents as “mismanagement and vandalism” of the estate allegedly executed by the trustees in whose hands Mr Karume left his multi-billion- shilling properties spread across the country from Nairobi to Kiambu, and Nakuru to Mombasa. Mr Karume, a former Cabinet minister who died in 2012, initially wrote a will dated February 19, 2009, which he revoked and replaced with a new one where he formed a trust in June 2011, about eight months before he died. The battle pits some of Karume’s children against each other since those who have gone to court to seek help in prising open the contents of the will say only two of their siblings — Dr Fransisca Wanjiku Kahiu and Mr Henry Waireri Karume — are privy to the day-to-day management and running of their late father’s estate. Four of Mr Karume’s eight children — Ms Lucy Wanjiru Karume, Mr Samuel Wanjema Karume, Mr Albert Kigera Karume, and Mrs Jane Mukuhi Matu — are challenging the manner in which the estate has been managed, claiming there has been massive revenue loss. The trustees and executioners deny the accusations. The dispute is likely to shine a light on wealthy individuals who have left their property in the hands of trustees to manage on behalf of beneficiaries, mostly children and grandchildren. At the centre of the Karume battle are the whereabouts of an estimated Sh200 million Ms Wanjiru and her siblings say was in bank accounts when their father died, the proposed sale of a Sh58 million property in Kiambu and an alleged controversial plan to borrow Sh480 million from GT Bank. The aggrieved children want the court to revoke the authority vested in the trustees whom they accuse of meddling and running down the estate. They also want renowned local or international experts to be appointed, under the court’s supervision, to manage the estate. The trustees are Mr James Raymond Njenga (chairman), Mr Henry Waireri Karume (Mr Karume’s son) and Mr Kungu Gatabaki. The executors of the will are Mr James Raymond Njenga, Dr Stephen Ndung’u Karau and Dr Fransisca Wanjiku Kahiu (Karume’s daughter). The four aggrieved siblings have told the court that the 100-room five-star Indian Ocean Beach Resort in Mombasa is closed and in a state of disrepair; the Jacaranda Hotel in the prime Westlands surburb of Nairobi has been run down and they claim that theft from the hotel occurs on a daily basis.

They also claim in court documents that a section of Pizza Garden, a restaurant adjacent to Jacaranda Hotel, has been partly demolished without their knowledge. They further allege that 70 pedigree dairy cattle and machinery at Cianda Farm in Kiambaa where Mr Karume loved to spend his free time were sold despite objections by Ms Wanjiru. The alleged mismanagement, they say, had resulted in the closure of Village Inn Restaurant near Kiambu Town and that their father’s entire business empire, which was thriving before he died, is headed for collapse unless the court intervenes and orders reorganisation of the management of the estate. Additionally, they want the court to open up details of the trust their father formed, details of which they claim they do not have in full.

The matter took an important turn two weeks ago when lawyer Peter Munge of Muriu Mungai and Company, acting for Ms Wanjiru, Mr Samuel Wanjema Karume and Mr Albert Kigera Karume (their other sibling Ms Jane Mukuhi Matu is represented by Mr James Gathaiya of Gaithaiya and Associates) wrote to Iseme, Kamau and Maema (IKM) Advocates — representing the trustees and executioners — asking for a meeting to resolve the contentious issues. But IKM responded that their clients were surprised by the claims and that as far as the trustees and executors were concerned, there had been no breach of law and none of the beneficiaries had raised any objection to the conduct of the estate until last week. (See separate story.) Ms Wanjiru says in her petition to court that after their father passed away, the children were called to the IKM offices in Nairobi and directed to sign documents indemnifying the trustees from any losses and stating that “we shall not question any action by the trustees as a condition for receiving allowances from the estate and trust”. She claims that those of her siblings who signed the document “under duress” have been receiving a Sh200,000 monthly allowance which she does not receive because she refused to sign the document. The matter is before Justice Lydia Achode who two weeks ago directed the parties to appear before her tomorrow. When the trust was formed in 2011, the trustees were Mr Karume himself as the founder, Mr Gatabaki (trustee), Henry Waireri Karume (trustee), Justice Paul Kihara Kariuki (trustee) and the widow, Ms Grace Njoki Njenga Karume, who was listed as an observer. Justice Kariuki, who is currently a court of Appeal judge and

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