Telkom Kenya and Mombasa Governor Joho Land Issue, Explained

Telkom kenya network issues

Telkom Kenya has been in a decade-long court battle involving Postel Housing Co-operative Society, a developer named Exclusive Estates Limited, and Mombasa Governor Joho, over a parcel of land on Ngong Road currently valued at Sh14bn.

The matter is still in the court, in an interesting case where all the four parties involved have been claiming the right to the asset, whose contracts were done 30 years ago.

Telkom has been selling its assets all over the country in a bid to raise funds after a failed merger with Airtel to match up to their market share with Safaricom.

Part of the land they consider their asset is the Ng’ong road 60-acre piece of land that the now non-functioning Kenya Posts and Telecommunication Corporation (KPTC) gave to Postel Housing in 1993 to construct houses for their workers.

KPTC is the one that was split into Postal Corporation of Kenya, Telkom Kenya, and the Communications Authority of Kenya in 199. When the transfer of land happened to Postel, Exclusive Estates was hired to do the construction project for Sh21 million but the project collapsed and this transfer never happened.

The business daily reported in April this year that Telkom had won a case in which Exclusive Estates Limited claimed to the land and was awarded through a Nairobi lawyer who was the sole arbitrator.
The arbitrator, Ms. Janmohamed was involved in 2019 to reinforce the 1993 contracts and other subsequent agreements. As seen in the standard 2 years ago, she also declared that the sale which happened between Aftraco Limited and Telkom in 2011, as null and void.

A high court justice awarded the land back to Telkom, but a senior principal magistrate recently allowed private prosecution of top officials over claims of what they allege was a fraudulent sale of the parcel of land to Aftraco.

“There is no doubt that the said action of purporting to sell the said parcel of land to a third party amounts to outright commission of fraud on their part and the part of the Telkom Kenya board,” said Postel Co-operative in an affidavit.

Current Telkom Kenya CEO Mugo Kibati, former CEO Michael Ghossein, and other directors have been included in this dispute. Postel claims they earlier wrote to the Director of Public Prosecution and the Director of Criminal Investigation about the matter, but the offices have not acted on it.

An urgent petition has been filed by Telkom Kenya to the high court, where they have argued that is a plan to push them towards not pursuing this land. The company also states that the private prosecution turns what is a civil case into a criminal case, and also loops in Executives like CEO Kibati who had not joined the company board until way past 2011.

Telkom Kenya, which is 40 percent owned by the Treasury and 60 percent controlled by private equity group Helios. The group going after Telkom officials comprises more than 300 staff who were formerly employed by Kenya Posts and Telecommunications Corporation (KPTC) when the first deal was happening in 1993.

Aftraco Limited is the firm linked to Mombasa Governor Ali Hassan Joho while Exclusive Estates Limited (EEL), is a firm belonging to controversial businessman Francis Mburu. The high court is still yet to decide whether the transaction between KPTC and Mr. Mburu’s firm is valid.

In this hotly contested piece of land, the State has acquired it and are is constructing a stadium.