How Jirongo was hounded from Hazina Estate

April 29, 2012 1:23 pm


Jirongo’s relation with Hazina Estate started in 1987 when his Sololo Outlets Limited purchased 23 acres of land in South B at a price of Sh60m/FILE
NAIROBI, Kenya, Apr 28 – Details emerging on the tussle between the National Social Security Fund and Cyrus Jirongo show how Cabinet Minister Mutula Kilonzo’s law firm played a key role in pursuing the Lugari MP following his fallout with the KANU regime over the development of Hazina Estate.

Kilonzo’s role began when Jirongo fell out with powerful forces in the regime and culminated in his ejection from the housing estate and seizure of his property.

Jirongo’s relation with Hazina Estate started in 1987 when his Sololo Outlets Limited purchased 23 acres of land in South B at a price of Sh60 million to develop middle income housing units. After he started the project, NSSF was then approached to take it over. Sololo then transferred all its rights to the Fund but was to continue with the development for the benefit of the Fund.

The development included 100 maisonettes, 320 residential flats, one nursery school, a shopping complex and a primary school with an initial capacity of 160 children. NSSF was then to pay Sh1.2 billion to Jirongo’s Sololo Outlets.

The defunct Post Bank Credit Limited was then contracted to disburse the funds that were due to Sololo. An initial sum of Sh600m was paid to Sololo and 50 percent of the development was completed.

The deal was however terminated by NSSF and Sololo Outlets kicked out after requesting additional funds, due to what Jirongo described as escalating costs as a result of inflation and negative publicity on the project.

After Jirongo was kicked out, Mugoya construction took over and completed the remaining 25pc of the project which then cost NSSF a staggering Sh1.5b.

Confidential documents seen by Capital FM News detail how Kilonzo gave instructions to the then Head of the Civil Service Philip Mbithi on the matter while others show how he reported back to former President Moi on the dispute.

In the letters, Kilonzo’s law firm gave instruction on what institutions like the CID and Special Branch were to do as part of investigations into how monies were paid out to Jirongo by the defunct Post Bank Credit Limited for development of Hazina Estate.

In one instance, the law firm recommended the removal of a CID officer who was investigating the saga.

“In the course of our work we have tended to sense a lack of enthusiasm on the part of the CID, particularly Mr Kimundi who has been the investigating officer. We subsequently recommended to the Committee that Mr Kimundi be replaced and this has been done. Mr Slim has taken over and we are happy to note a distinct improvement in attitude,” one of the letters to Mbithi says.

In the same letter, Kilonzo urged: “It is vital to ensure that those principal participants in the transactions particularly Dr Davy Koech are pursued with the same vigour and some tenacity as Mr Jirongo to avoid any accusations of discrimination.”

Another confidential letter to Moi by Kilonzo says : “We have identified more than 180 properties belonging to either the companies aforementioned or Mr Jirongo personally… we have recommended that the Special branch investigate to locate other assets owned by Mr Jirongo, relatives, associates…. as the possibility still exists that what we have is not exhaustive.”

At one point, Kilonzo asked Mbithi to instruct the Special Branch to; “mount detailed surveillance on Jirongo and his associates to ascertain/whether there are and prepare against any threats to State security as a result of massive cash believed to be in his possession”

Kilonzo’s law firm was singled out in a report by the Controller and Auditor General as having been improperly paid Sh176 million alongside several other legal firms that earned a total of Sh252 million when acting for NSSF in the Hazina Estate dispute.

On Saturday, Kilonzo was quoted by the Standard newspaper denying any political machinations.

“I acted in the best interest of my client. I did what my client wanted me to do… I was doing legal work not politics,” said Kilonzo.

Kilonzo said that he was aware the NSSF/Sololo saga was still active and being handled by a law firm he has since resigned from.

Insiders say Jirongo was being hounded by old forces in KANU after he emerged as a power broker in the 1992 multi-party politics.

Jirongo was seen an affront to the old order then consisting of Nicholas Biwott, George Saitoti and Joseph Kamotho in what was known as the KABISA axis (Kamotho, Biwott, Saitoti).

When NARC came to power in 2003, Jirongo wrote a letter to the then Governance PS John Githongo detailing how Sololo outlets was used to siphon cash when it was taken from him and placed under receivership.

It is not clear whether Githongo pursued the matter.

Early this month, Jirongo was paid Sh490 million as a negotiated settlement by NSSF.
Queries raised by the payments prompted Jirongo to demand return of the estate in exchange for return of Sh1.3b paid by NSSF so far.


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