By NEVILLE OTUKI
In Summary
- A law firm has placed a winding up notice in the Kenya Gazette that will lead to sale of the firm’s assets to pay off creditors and then dissolve the business.
The fortunes of construction tycoon James Mugoya
will dip further as a law firm prepares to wind up his company over a
legal debt linked to a multi-million shilling settlement with the
National Social Security Fund (NSSF).
Gichuki King’ara & Company Advocates has
placed a winding up notice in the Kenya Gazette that will lead to sale
of the firm’s assets to pay off creditors and then dissolve the
business.
The law firm, which acted for the construction
company in a Sh342 million suit against the NSSF, is pursuing Sh29.4
million in legal fees even as Mugoya Construction Company relocates to
Uganda, the home country of its majority shareholder and managing
director, Mr Mugoya.
The winding-up petition is another blemish to the
construction company, which in the former president Daniel arap Moi’s
reign emerged among a group of politically well-connected contractors
that made money from government contracts.
“Notice is given that a petition for the
winding-up of Mugoya Construction and Engineering Company Limited by the
High Court,” read the notice.
“The said the petition is directed to be heard
before the court sitting at Milimani … and any creditor or contributory
of the said company desirous to support or oppose the making of an order
on the said petition may appear at the time of hearing in person or by
his advocate.” Gichuki King’ara & Company moved to the High Court
last year claiming that the construction firm had declined to pay for
legal services rendered.
The law firm froze the company’s accounts in
Middle East Bank, Stanbic Bank, KCB, Transnational Bank, Citi Bank and
Habib Bank—which were said to hold Sh324 million that the NSSF paid the
construction firm.
The court was told that equipment and assets could
not be located and that some of them were being transferred to Uganda.
Since the exit of President Moi, Mr Mugoya has been in the news for the
wrong reasons.
Mr Mugoya, 63, studied engineering where he is
rumoured to have struck a friendship with Mr Moi’s son. This ushered him
into the corridors of power, yielding a business partnership that made
him a beneficiary of coveted projects like NSSF’s Embakasi Housing in
1993.
Things changed for Mr Mugoya after the 2002 when
two road contracts he had been awarded were cancelled by the Narc
government. The Sh324 million NSSF out-of- court settlement, which
provoked public fury, has its roots in a 1995 failed housing project in
Karen.
The project hit a snag after the City Council of
Nairobi refused to grant approval for the drawings, arguing that the
type of development was not permitted in the exclusive Karen area.
Consequently, NSSF asked Mugoya not to do any work until all approvals had been granted.
Ten years later, long after the project had been
cancelled, he hit the NSSF with a Sh633 million claim. The matter
dragged on in court for years before he was paid Sh342million.
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