The National Lands Commission (NLC) allocated a prime plot belonging to a state corporation, to a private developer and the latter secured a bank loan using the land as collateral.
However, Trust Bank, the institution under which the developer had secured a loan, collapsed forcing the then Depositors Protection Fund (DPF) to take charge of the title deed.
The piece of land was in November 2015 sold by the Fund to an American company, WIPI Group USA for Sh 1.2 billion.
Documents provided before a parliamentary watchdog committee indicated the piece of land belonging to The National Council for Population and Development (NCPD) located at Nairobi’s Upper hill area was allocated to the developer (Rosestar Properties Limited) without making reference to the council.
Council managing director Josephine Kiban Mbae (pictured) told members of the Public Investment Committee (PIC) that the land measuring 0.63 hectares which had been reserved to the council in 1989, was subsequently allocated to a private developer.
“The council attempted to take possession of the property on November 12 , 2016 following the PIC recommendation. This did not materialise,” she said.
Yesterday, PIC chairman Abdullswamad Nassir directed that the NLC be summoned to explain why it allocated government land to a private developer even after being advised against doing so.
In its defence, Rosestar Properties in a letter to the Lands ministry, said the company was allocated the land in October, 1996 after the NCPD relinquished their interest legally.
Thereafter, the committee heard, Trust Bank obtained a charge on the title for a sum of Sh 200 million, which charge was transferred to DPF when the bank went into liquidation.
The developer went to court after the Commissioner of Lands revoked the title deed and successfully managed to reclaim the title on September 13, 2013.The office of the Attorney General also waded into the matter directing the Registrar of Titles to revert the title to the registered owners, Rosestar Properties.
The Director of the Deposit Protection Fund, now Kenya Deposit Insurance Corporation, said its submission that Rosestar Properties had taken Sh200 million loan from Trust bank that later became insolvent.
Mbae told the committee that the council was still pursuing other land parcels, in Murang’a and Kisii which were also under threat of being grabbed by private developers.