Kiuna Ngugi: The Perenial Litigant Billionaire

One Kiuna Ngugi, will go down in history books as the billionaire who had seemingly amassed wealth from compensations of law suits. Virtuoso in the art. Like Human rights and social injustice activist Senator Okiya Omtata, Kiuna Ngugi is the master of the same in his cadre, Corporate business sphere. It has worked perfectly well for him, almost all the time. He seizes every opportunity, strategically creates loopholes that later reaps big for him and his enterprise.

Whether the Kenya justice system favors him or its just fate, is a mystery known best to him and nature.

Since time immemorial, Kenya insights has been on the radar sequence of this gentleman -Litigant cum billionaire. He is no stranger to corridors of justice system, lawsuits works best for him, always gets hefty compensations at the end. He cleans his dirty tracks online, in blogs, whats left apparently are all praises of ‘hosanna in the highest’

Talk of TransCentury Ltd (TCL), XRX Technologies, BOC, Liqour Distributor Maxam ltd, he is the owner, Director and some more shell companies registered under proxies.

Below are highlights and insights of some of the exemplifications that one Kiuna Ngugi has had upto date.

1.His XRX Technologies with Maseno University.

In 2019 when former Maseno University deputy vice chancellor in charge of academic affairs Mary Walingo hand-picked a company to supply Xerox machines, she set in motion a chain of events that could then see the institution lose millions of shillings while offering a peek into financial irregularities that have nearly bankrupted some higher learning institutions.

The contract saw Maseno University pay Sh44 million for machines that barely functioned for the six years the contract was in force in violation of public procurement laws. Maseno University contracted Kiuna’s XRX Technologies, on February 8, 2010 to supply the machines. XRX was also to offer printing and binding services that were beyond the machines’ capability. The firm delivered and installed 19 machines within various buildings at the university’s main campus in Kisumu County.

Under the deal, Maseno was to pay Sh700,662 with additional fees for other services that the photocopying machines were incapable of performing. Of the 17 machines Maseno acknowledged receiving, only two were functional. Despite the machines malfunctioning, the university still paid the monthly fees in the first three years.

Prof Walingo, former vice chancellor at Maasai Mara University, got under Investigation over embezzlement of Sh90 million at the institution. Two years into the contract between Maseno and XRX, the university started defaulting on the monthly payments.

In May 2012, eight Maseno University bosses met three officials from XRX in a bid to resolve the payment standoff. The parties resolved to reconcile accounts and determine unpaid debts. Any undisputed debts such as those accruing from printing of look into the debts claimed by graduation materials, calendars and examination papers were to be settled within seven days of the meeting. In the course of a series of meetings, Prof. Walingo was tasked with heading a committee that would look into the debts claimed by XRX. The committee however failed to prepare a report or give feedback in relation to the debts.

In another meeting held in December 2014, the university expressed its dissatisfaction with the machines. Homa Bay County Assembly Speaker Elizabeth Ayoo who was at the time Maseno University’s legal officer, said in the meeting that the institution’s bone of contention was that the malfunctioned machines were in that state because XRX was not servicing them.

At the end of the December 2014 meeting. Maseno University agreed to the Sh25 million that had at the time accrued before the end of the year. However, after defaulting, XRX sued the university for Sh44 million. Won the lawsuit and got compensated.

2. At some point Deputy CBK Governor, IBM and XRX Among Cartels Swindling The Bank​

The deal involved few cartels among them Brian Nyakeri from IBM, Esat Ferra from UK (Ex-IBM staffer), CBK Deputy Governor Sheila M’Mbijjewe, CBK IT Manager  Jeff Mugo and Lucy Njoroge and Kiuna Ngugi the owner of XRX.

This unnamed external company was chosen as a conduit to make payments outside Kenya. Their consultant, Ferra, was instrumental in providing references from outside countries and insisting that foreigners (Indians & Nigerians) would be the implementation consultants on the ground.

The tender which was announced on March 28 entailed upgrade, installation and implementation of IBM power8 enterprise servers, a storage area network, director-class switching, disk back-up solution, associated software, accessories and cabling. In a surprise move, XRX Technologies won the tender award despite being incapacitated to undertake the work and being the highest bidder at Ksh904 million.

According to our inside source, the cost of the equipment from vendor was supposed to be Ksh380 million, whilst the value of the whole job almost tripled. XRX Technologies Ltd, based in Westlands, Nairobi, clinched the lucrative deal after rivals Symphony Technologies Ltd and Trans Business Machines Ltd (TBM) were edged out on technicalities despite being the better options in terms of ability and cost-friendliness to do the work.

Sources indicated that Symphony’s bid price was Ksh 816,298,185, while TBM bid at Ksh 875,039,581 and XRX Technologies Ltd at Ksh 904,443,957.

“Tender Requirement above XRX ability who were highest winning bidder. The expected number of certified skills, number of references and experience was beyond XRX capacity. So Jeff cleverly called for an addendum, after initial tender release, to allow Joint Ventures so that UK distributor can present his credentials through the fronting local reseller, XRX,” said a staffer at CBK.

The role of Esat was now official as project manager and his visiting CBK HQ since July like a boss, with an arrogant attitude, calling and ordering all IT staff involved since he is the owner of the delivery of this particular project – with permission from Mugo.

Before the tender was awarded, Mugo had lengthy calls with Nyakeri for planning sessions and they organised multiple meetings formally with Ferra. The trio agreed to have XRX quote the highest price, in order to cater for kick backs.

XRX owner Kiuna Ngugi, Lucy Njoroge, Jeff and Brian met consistently during tender evaluation to scheme how to ensure only one bidder, highest bidder, wins. Informal meetings were late evenings and weekends in varying venues including public clubs (SOHOs), private golf clubs (Vet), and offices (Crawford Business Park, State House Road – Distributor office).

Registration book at CBK reception showed that Kiuna, Jeff, Lucy and Brian’s vehicles visited the premises after work hours and during the weekend, to plan the kill. The configuration was designed as an over-kill with more capacity than was required to escalate cost.

Also, installation was to be done by foreigners and training in UK (raises costs and ensures foreign trips for Mugo and other staff to collect kickbacks).

“Setup was to be controlled by Jeff (Mugo). None of the existing senior administrators of the current servers and storage at CBK were involved as they could challenge the sizing or specifications created by Jeff and his cohort,” intimates our source.

3. Nakumatt Vs Kiuna Ngugi

In 2018, Ngugi Kiuna sued Nakumatt CEO Atul Shah for issuing bouncing cheques to settle the supermarket’s debts. Retail chain Nakumatt’s troubles deepened after Kiuna sued its chief executive, Atul Shah, for issuing bouncing cheques to settle the supermarket’s debts. Mr Kiuna claimed that Mr Shah in March 2017 issued him with 10 cheques as payment for liquor he had supplied to the supermarket in 2016 but the banks dishonoured the cheques prompting him to file a complaint with the police. He got compensated at the end.

4. BOC Kenya

In 2021 Billionaire businessman Ngugi Kiuna sought the termination of the Carbacid Investments’ buyout of BOC Kenya after filing an objection to the deal at the Capital Markets Tribunal citing undervaluation. Mr Kiuna, a former BOC Kenya chairman, said the Capital Markets Authority (CMA) erred in approving the takeover by ignoring the undervaluation of BOC besides disregarding the protection of interests of minority shareholders.

The tycoon, who held 1.4 million BOC shares equivalent to a 7.6 percent stake, filed the appeal on March 1, 2021.

Carbacid and Aksaya Investments LLP, a firm controlled by its major shareholder Baloobhai Patel, teamed up to offer BOC investors a buyout price of Sh63.5 per share or an aggregate of Sh1.2 billion.

“That the approval granted by the first respondent in respect of the proposed takeover offer by Carbacid Investments Plc and Aksaya Investments LLP to acquire up to 100 percent of the issued ordinary shares of BOC Kenya Plc be set aside in its totality for being invalid, null and void ab initio,” Mr Kiuna said.

The businessman laid out the grounds for his contention that Carbacid’s offer is inadequate. He said that as of December 31, 2020, BOC had Sh1.1 billion in cash and cash equivalents alone.

Dyer and Blair Investment Bank, the independent financial advisor hired by BOC to review Carbacid’s offer, said that the bid undervalued the company by 30.8 percent.

Dyer and Blair stated that BOC share was worth Sh91.76 a piece, valuing the firm at Sh1.7 billion. This is Sh552 million more than Carbacid’s total bid price of Sh1.2 billion. The board of BOC agreed with the investment bank’s assessment and told shareholders to make up their own mind with regard to the merits of Carbacid’s offer.

This came after BOC’s majority shareholder, BOC Holdings, had already committed to sell its 65.38 percent stake to Carbacid at the Sh63.5 per share offer price.

Mr Kiuna filed documents which he said demonstrate that the CMA went out of its way to accommodate Carbacid’s takeover bid, including by relaxing the buyout conditions and aiding information blockage.

The CMA on its part insisted that all the relevant disclosures to BOC shareholders have been made and it is upon them to make their own individual decisions.

The Authority also noted the contents of the final independent financial advisor circular and is satisfied that the circular contains material information that the shareholders of BOC Kenya and their independent professional advisors would reasonably require or expect to be informed about in relation to the offer,” the CMA wrote to BOC’s board.

This was the same stance taken by the regulator in 2018 when it refused to wade into allegations that US conglomerate Seaboard Corporation was undervaluing Unga Group in its bid of Sh40 per share.

The regulator, however, appeared to take a tougher stance in earlier buyout deals, including scuttling BOC’s previous bid to acquire Carbacid.

BOC announced its intention to buy Carbacid in December 2005. Shareholders of both companies were happy to conclude the transaction but the CMA was not satisfied with the manner in which BOC waived its minimum threshold for acceptances, freezing the deal until October 2009 when it was called off. Mr Ngugi became the second high-net-worth Kenyan to protest a buyout of a Nairobi Securities Exchange-listed firm on the basis of undervaluation, among other grievances.

5. Old Mutual Life Assurance Company (OMLAC) suit involving Ngugi kiuna

He filed a suit arguing that OMLAC’s shares were undervalued in the company’s merger with UAP Holdings.

6. Heineken

Recently, Court of Appeal declined to quash the Sh1.79 billion compensation bill slapped on it for terminating Ngugi Kiuna’s firm Maxam Ltd distributorship role.

A three-judge bench of the appellate court comprising of Justices Pauline Nyamweya, Abida Ali-Aroni, and John Mativo upheld the decision of the High Court that the move by Heineken East Africa to terminate the distribution agreement with Maxam Limited was unprocedural, illegal, and unlawful.

They also upheld the award by the High Court to Maxam Ltd of special damages for loss of business amounting to Sh1,799,978,868.00 to be paid by Heineken E.A and Heineken B.V, arising from their repudiatory breach of the Kenya Distribution Agreement.

While dismissing the consolidated appeals by Heineken East Africa Import Company Ltd and Heineken International B.V, the judges found Maxam Ltd owner Kiuna laid out justifiable reasons as to where it was entitled to the compensation damages amounting to billions of shillings from the international beer maker.

Heineken had approached the court of appeal stating that the high court erred when it issued an order to have it compensated Maxam limited 1.7 billion arguing that there were no damages payable and that it’s wrong that the judgement came to that consciousness.

Lucky Guy!