Auditor-General Edward Ouko wants Moi-era Internal Security ministry officials charged for the loss of Sh2.4 billion in fraudulent buying of 37.4 acres of land for the General Service Unit in Ruaraka.
The government officials in 1988 bought 196 housing units constructed on 17.8 acres from the defunct Kenya Posts and Telecommunications Corporation (KPTC) at a cost of Sh64 million.
But following a court battle, it was declared that the units and the land were owned by Afrison Export Import Ltd which had already been paid Sh1.8 billion in compensation.
“In view of these anomalies, it is clearly evident that those responsible for directing and approving the use of public funds contrary to law should be held accountable and liable for the loss,” Mr Ouko said in his audit report for the fiscal year ending June 2014.
Part of the land on which the houses sit had been part of a larger 96-acre piece of land. The remaining 78.2 acres were also being contested by developers who claimed that they had been given allotment letters by the defunct City Council of Nairobi.
“In 2006, the then Commandant of GSU hived off an additional 19.5 acres which they intended to purchase from the Official Receiver or the registered proprietors so that they could keep private developers away from the GSU,” Mr Ouko added.
But Nairobi tycoon Francis Mburu later moved to court over the land, accusing the government of an illegal takeover of the 37.4 acres belonging two companies – Afrison, and Huelands Limited – which are associated with him.
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The High Court in February 2012 awarded the businessman Sh4 billion for the disputed land but this was later negotiated by the attorney-general down to Sh2.4 billion.
“It is not clear from the records how KPTC assumed ownership to purport to sell the said property. I hold that KPTC could not have passed and did not pass on to the third defendant any title.
“Accordingly, I hold that the property… that is LR No 787924 and the compensation sought shall be on that entire property,” ruled Justice Alfred Mabea.
In the fiscal year ending June 2014, the government paid Sh1.2 billion to Afrison while in the financial year ending June 2015, the government paid another Sh600 million.