際際滷

際際滷Share a Scribd company logo

2015.10.22 tatu city majority shareholders reassert control over project v3

Download as DOCX, PDF
Mandi Karige
Mandi Karige

After years of lawsuits attempting to thwart the project, the majority shareholders of Tatu City have taken control to protect their investment in the mixed-use development near Nairobi. They appointed a new legal representative and withdrew from a lawsuit filed without board approval. An audit of loan facilities was also ordered in response to minority shareholders' claims of lack of transparency. However, the minority shareholders have continued legal filings in attempts to extort money from the project, and they remain under criminal investigation for an unrelated land theft case.

1 of 2
Download to read offline
EMBARGOED UNTIL FURTHER NOTIFICATION ON 22 OCTOBER 2015 Tatu City majority shareholders reassert control of project 22 October 2015 Summary After four years of spurious lawsuits and other attempts by Kenyan minority shareholders to thwart and extort Tatu City Limited, the projects majority shareholders have taken decisive steps to protect their investment and proceed with the 2,500-acre mixed-use, mixed-income development near Nairobi. The actions of the Tatu City Limited board, carried out in full accordance with corporate governance and Kenyan law, ensure that Nahashon Nyagah and Vimal Shah, who have invested almost no money in the project, can no longer block the creation of tens of thousands of jobs and homes at Tatu City. Background On 16 Sept 2015, all Tatu City Limited directors participated in a board meeting held at Tatu House, located on the project site, to discuss the circumstances that led to the High Court (Milimani) Civil Case No. 46 of 2015. During the course of that meeting, the board decided by majority vote with all directors present that Nelson Havi of Havi & Co Advocates could not represent Tatu City Limited. The decision was taken because Havi was never appointed by the board to represent the company; rather, in collusion with minority directors Nyagah and Shah, Havi illegally, inconceivably and with no authority whatsoever committed Tatu City Limited (and Kofinaf Limited) to be part of Case No. 46 of 2015. The board members could not fathom how a lawyer not appointed by the board could file a lawsuit against the companys majority board directors who have provided all of the financing for the project. Moreover, the lawsuit was filed with the support of minority directors Shah and Nyagah, who did not consult with the board before instructing Havi to file Case No. 46 of 2015. Havi, Shah and Nyagah also stated falsely to the High Court of Kenya that they had authority to file Case No. 46 of 2015. Board & Majority Shareholder Actions In order to correct this perversion of corporate governance and abuse of the judiciary, the Tatu City board has taken the following decisions: 1. Appointed Ahmednasir Abdullahi, of Ahmednasir, Abdikadir & Co Advocates, as the legal representative of Tatu City Limited (and Kofinaf Limited). 2. Instructed Mr Abdullahi to withdraw Tatu City Limited (and Kofinaf Limited) as plaintiffs in Case No. 46 of 2015. Accordingly, as of 22 October 2015, neither company is party to Case No. 46 of 2015. 3. In response to requests by Nyagah and Shah, the board distributed an audit conducted by EY of the projects major loan facility. Nyagah and Shah repeatedly insisted on using PwC Kenya for such an audit, but that firm was found to have a number of conflicts of interest related to its long-term relationship with Bidco, of which Shah is CEO. 4. For absence of doubt, meeting on 22 October 2015 the board ordered an additional independent audit of the loan facility, to be carried out by a reputable international auditing firm. o Despite their public claims that the majority shareholders are blocking such an audit, Nyagah and Shah have ignored the majority shareholders repeated offers to hire any firm (except PwC Kenya) to audit the loan facility. o Nyagah and Shahs claims that Tatu Citys majority directors have refused to agree to an audit of the loan facility are undermined by the minutes of the 16 September 2015 board meeting, which Nyagah and Shah themselves submitted as evidence in a court motion brought by Nyagah and Shah. In the minutes, Tatu City director and majority shareholder Stephen Jennings states: I welcome a discussion at this time about an audit. That is a very valid point. So, the majority shareholders would like to undertake and audit. We have
agreed to it previously and it has been administered previously. We are happy to work with any recognized international audit firm in the world with the exception of PWC Kenya. So that gives many, many choices. So, Vimal, if you want an audit, lets appoint EY, KPMG, Deloitte, okay? Let us agree on proper terms of reference and let us start the audit. We welcome that. As you know, we have never tried to resist having an audit. So would you like to start an audit? (Vimal Shah does not respond) o Despite their claims to the contrary, Nyagah and Shah, as board directors, have been repeatedly briefed on the status of the loan facility and agreed to it in board meetings. o Rendeavour, the majority shareholder in Tatu City Limited, has proposed to Shah and Nyagah a path to zero to reduce the debt. A number of suggestions were put forth which Nyagah termed utter madness in an email. More Spurious Legal Filings by Nyagah, Shah and Havi Nyagah, Shah and Havi have made applications to the High Court to have Ahmednasir Abdullahi struck out to represent the plaintiff companies Tatu City Limited and Kofinaf Limited, based on spurious claims that Nyagah and Shah had previously agreed to work with Mr Abdullahi. Mr Abdullahi has made a clear statement in court that Havi and Nyagah had approached him to request he manipulate Justice Farah Amin to rule in their favour in February 2015. Mr Abdullahi refused, and therefore never worked for Nyagah and Shah. Thus, this application is baseless. The group has also made an application to the High Court, arguing that the 16 September 2015 board meeting which they attended was held in contempt. Because the plaintiffs themselves attended the board meeting, their application is baseless. These are the latest examples of Nyagah, Shah and Havis attempts to confuse the courts and public in order to extort money from Tatu Citys majority shareholders. Criminal Case Proceeds Nyagah and Havi remain under criminal investigation by the CID of the Kenya Police in regard to their attempt to steal over 2,000 acres of land belonging to companies associated with Tatu City Limited (but not part of the satellite city development). According to media reports, the CID recommended to the Department of Public Prosecution that Nyagah, Havi and more than a dozen relatives and associates of Nyagah be charged with fraud. The case file is now being reviewed by the DPP. The CID and DPP have lawful authority and constitutional powers to investigate the commission of any criminal conduct. It is against public policy to stop that process. The law allows criminal and civil cases to be prosecuted concurrently. The law also envisages such a scenario. Investment in Tatu City Limited Nyagah has not invested any money in Tatu City Limited. Shah made a one-time investment of $289,000, which represents less than 0.3% of the project cost. Meantime, the international shareholders have invested over $100 million in Tatu City.

More Related Content

2015.10.22 tatu city majority shareholders reassert control over project v3

  • 1. EMBARGOED UNTIL FURTHER NOTIFICATION ON 22 OCTOBER 2015 Tatu City majority shareholders reassert control of project 22 October 2015 Summary After four years of spurious lawsuits and other attempts by Kenyan minority shareholders to thwart and extort Tatu City Limited, the projects majority shareholders have taken decisive steps to protect their investment and proceed with the 2,500-acre mixed-use, mixed-income development near Nairobi. The actions of the Tatu City Limited board, carried out in full accordance with corporate governance and Kenyan law, ensure that Nahashon Nyagah and Vimal Shah, who have invested almost no money in the project, can no longer block the creation of tens of thousands of jobs and homes at Tatu City. Background On 16 Sept 2015, all Tatu City Limited directors participated in a board meeting held at Tatu House, located on the project site, to discuss the circumstances that led to the High Court (Milimani) Civil Case No. 46 of 2015. During the course of that meeting, the board decided by majority vote with all directors present that Nelson Havi of Havi & Co Advocates could not represent Tatu City Limited. The decision was taken because Havi was never appointed by the board to represent the company; rather, in collusion with minority directors Nyagah and Shah, Havi illegally, inconceivably and with no authority whatsoever committed Tatu City Limited (and Kofinaf Limited) to be part of Case No. 46 of 2015. The board members could not fathom how a lawyer not appointed by the board could file a lawsuit against the companys majority board directors who have provided all of the financing for the project. Moreover, the lawsuit was filed with the support of minority directors Shah and Nyagah, who did not consult with the board before instructing Havi to file Case No. 46 of 2015. Havi, Shah and Nyagah also stated falsely to the High Court of Kenya that they had authority to file Case No. 46 of 2015. Board & Majority Shareholder Actions In order to correct this perversion of corporate governance and abuse of the judiciary, the Tatu City board has taken the following decisions: 1. Appointed Ahmednasir Abdullahi, of Ahmednasir, Abdikadir & Co Advocates, as the legal representative of Tatu City Limited (and Kofinaf Limited). 2. Instructed Mr Abdullahi to withdraw Tatu City Limited (and Kofinaf Limited) as plaintiffs in Case No. 46 of 2015. Accordingly, as of 22 October 2015, neither company is party to Case No. 46 of 2015. 3. In response to requests by Nyagah and Shah, the board distributed an audit conducted by EY of the projects major loan facility. Nyagah and Shah repeatedly insisted on using PwC Kenya for such an audit, but that firm was found to have a number of conflicts of interest related to its long-term relationship with Bidco, of which Shah is CEO. 4. For absence of doubt, meeting on 22 October 2015 the board ordered an additional independent audit of the loan facility, to be carried out by a reputable international auditing firm. o Despite their public claims that the majority shareholders are blocking such an audit, Nyagah and Shah have ignored the majority shareholders repeated offers to hire any firm (except PwC Kenya) to audit the loan facility. o Nyagah and Shahs claims that Tatu Citys majority directors have refused to agree to an audit of the loan facility are undermined by the minutes of the 16 September 2015 board meeting, which Nyagah and Shah themselves submitted as evidence in a court motion brought by Nyagah and Shah. In the minutes, Tatu City director and majority shareholder Stephen Jennings states: I welcome a discussion at this time about an audit. That is a very valid point. So, the majority shareholders would like to undertake and audit. We have
  • 2. agreed to it previously and it has been administered previously. We are happy to work with any recognized international audit firm in the world with the exception of PWC Kenya. So that gives many, many choices. So, Vimal, if you want an audit, lets appoint EY, KPMG, Deloitte, okay? Let us agree on proper terms of reference and let us start the audit. We welcome that. As you know, we have never tried to resist having an audit. So would you like to start an audit? (Vimal Shah does not respond) o Despite their claims to the contrary, Nyagah and Shah, as board directors, have been repeatedly briefed on the status of the loan facility and agreed to it in board meetings. o Rendeavour, the majority shareholder in Tatu City Limited, has proposed to Shah and Nyagah a path to zero to reduce the debt. A number of suggestions were put forth which Nyagah termed utter madness in an email. More Spurious Legal Filings by Nyagah, Shah and Havi Nyagah, Shah and Havi have made applications to the High Court to have Ahmednasir Abdullahi struck out to represent the plaintiff companies Tatu City Limited and Kofinaf Limited, based on spurious claims that Nyagah and Shah had previously agreed to work with Mr Abdullahi. Mr Abdullahi has made a clear statement in court that Havi and Nyagah had approached him to request he manipulate Justice Farah Amin to rule in their favour in February 2015. Mr Abdullahi refused, and therefore never worked for Nyagah and Shah. Thus, this application is baseless. The group has also made an application to the High Court, arguing that the 16 September 2015 board meeting which they attended was held in contempt. Because the plaintiffs themselves attended the board meeting, their application is baseless. These are the latest examples of Nyagah, Shah and Havis attempts to confuse the courts and public in order to extort money from Tatu Citys majority shareholders. Criminal Case Proceeds Nyagah and Havi remain under criminal investigation by the CID of the Kenya Police in regard to their attempt to steal over 2,000 acres of land belonging to companies associated with Tatu City Limited (but not part of the satellite city development). According to media reports, the CID recommended to the Department of Public Prosecution that Nyagah, Havi and more than a dozen relatives and associates of Nyagah be charged with fraud. The case file is now being reviewed by the DPP. The CID and DPP have lawful authority and constitutional powers to investigate the commission of any criminal conduct. It is against public policy to stop that process. The law allows criminal and civil cases to be prosecuted concurrently. The law also envisages such a scenario. Investment in Tatu City Limited Nyagah has not invested any money in Tatu City Limited. Shah made a one-time investment of $289,000, which represents less than 0.3% of the project cost. Meantime, the international shareholders have invested over $100 million in Tatu City.