Mombasa tycoon TSS’ land up for sale over bank debts

The late Mombasa tycoon Tahir Sheikh Said popularly known as TSS. PHOTO | FILE 

By JAMES KARIUKI

In Summary

• KCB Group, NIC Bank and Bank of Africa (BOA) are among the lenders that had disbursed loans to various subsidiaries of the TSS empire, which subsequently failed to service the debts.
• The assets that are expected to under the auctioneer’s hammer next Monday include idle and developed beachfront land in Lamu, Mombasa and Kilifi counties, according to a notice by Garam Investments Auctioneers.
• The sale is expected to attract institutional investors and wealthy individuals.

Commercial banks that had lent Mombasa tycoon Twahir Sheikh Said (TSS) billions of shillings have put up more than 6,700 acres of his leasehold land holdings and property on the Kenyan coast for sale, adding impetus to his business empire’s free fall that began late last year.

Mr Said, who died early this month, had defaulted on loans amounting to more than Sh3.5 billion that various entities in his vast business empire had borrowed from local banks but were unable to pay by early last year.

READ: From the height of political power and business, TSS empire falls apart

KCB Group, NIC Bank and Bank of Africa (BOA) are among the lenders that had disbursed loans to various subsidiaries of the TSS empire, which subsequently failed to service the debts.

The assets that are expected to go under the auctioneer’s hammer next Monday include idle and developed beachfront land in Lamu, Mombasa and Kilifi counties, according to a notice by Garam Investments Auctioneers.

The properties sale is expected to fetch billions of shillings in aggregate, helping to retire the TSS loans that are estimated to constitute the banking industry’s largest exposure to a single entity.

Garam says prospective bidders will need to deposit between Sh1 million and Sh10 million before participating in the sale, indicating the high value of the properties.

The sale is expected to attract institutional investors and wealthy individuals.

The assets on sale represent properties that the TSS entities had pledged directly to the banks or through KAAB Investments, a company owned by the late businessman’s brother-in-law Aweys Mohamed Ahmed.

Mr Ahmed was part of a group that ran the TSS empire more recently as poor health slowed the billionaire down.

READ: Debt tussle drags shadowy Coast tycoon back into the limelight

The auctioneer has put up for sale a 6,178-acre property fronting the Indian Ocean in Lamu County, and which is currently used for salt production by TSS Salt Manufacturers Limited.

“The property has a long and winding frontage to the Indian Ocean to its southern boundary and fronts Witu to Mokoye road to its northern boundary,” said the auction notice.

“The close proximity of the subject property to the ongoing Lamu/LAPSSET project improves the subject property’s future prospects in terms of capital value appreciation.”

Some 466 acres in Kilifi, also owned by TSS Salt Manufacturers, are also on sale, targeting investors with an interest in salt production.

Also on the auction list are an industrial property in Mombasa and 50 acres of land in Kilifi.

Dismantling of empire

The sale marks the latest dismantling of the TSS empire that was built on debt, and more recently fell victim of gross mismanagement.

Kenya’s biggest bank by assets KCB last year took over the management of TSS Unga Millers after it failed to repay a Sh1 billion loan.

READ: KCB takes over Mombasa tycoon’s company in Sh1bn bad debt tussle

Bank of Africa also moved to seize some of TSS’s assets after Juja Coffee Exporters, another of the family’s businesses, defaulted on a Sh1 billion loan.

Other TSS entities are said to have defaulted on a Sh1.4 billion NIC Bank loan and Sh300 million National Bank of Kenya credit.

Depending on the success of the auction, the asset sales could boost efforts by the affected banks to repair their balance sheets at a time when interest margins have narrowed significantly with the control of interest rates.

Before his death, TSS blamed the debt crisis on Mr Ahmed and his children whom he accused of reckless borrowing after he relinquished the management of the family business to them.

TSS said in court documents that he had stepped aside from the day-to-day running of the businesses in 2010 due to health problems.

He said he started receiving notices from financial institutions in 2015 and was shocked to learn that from 2010 the companies had borrowed heavily for reasons he didn’t know.

TSS will be remembered for building a vast business empire that gave him immense political influence at the Coast, especially during the Kanu era when he became one of the prominent financiers of the party and its candidates.

He started off the business in 1968, transporting building materials, fuel, coffee and tea across East Africa, including Zaire, Sudan and Egypt.

He later founded other companies, some of which have been seized by the lenders.

As his wealth grew so did his philanthropy — he contributed to religious causes and activities he believed would boost the welfare of the local communities.

TSS, listed as one of the largest land owners in the country in a wealth report released in 2014, has also featured in several court cases involving land ownership in Lamu.

The billionaire’s name featured prominently in the Lamu land inquiry conducted by the National Land Commission following orders by President Uhuru Kenyatta.

Land issues were said to have been at the centre of violent clashes witnessed at the Coast in early 2014, prompting President Uhuru Kenyatta to revoke title deeds.

TSS was one of the wealthy men whose title deeds were cancelled.

jkariuki@ke.nationmedia.com