Mugoya Woes: Big names appear in NSSF list of shame (December 2004)

Published on December 16, 2004, Standard

Andrew Teyie

Companies, MPs, and lawyers, who owe Kenyan workers close to Sh4 billion were yesterday named.

Also made public in the report approved by the National Social Security (NSSF) board on Tuesday, were cases where individuals are claiming huge payments from the Fund for services rendered.

The report documents the history of the disputes and the current position.

Among the people featuring in the report are nominated Kanu MP Mutula Kilonzo, former MP Cyrus Jirongo, former NSSF managing trustee Ben Mtweta, Kenyatta National Hospital, former Kenya Revenue Authority Commissioner-General, John Munge, Mugoya Construction Company, and former Head of Civil Service Dr Sally Kosgey.

According to the documents, some of the disputes are pending in court while others have been awarded to lawyers for pursuance.

The report documents disputes where individuals are claiming huge some of money for services rendered to NSSF.

In an interview with The Standard and KTN, NSSF Managing Trustee Naftali Mogere vowed that they would aggressively pursue the disputes.

He said the board would follow the due process of law to see the cases to their logical conclusion.

He stated that the Fund was working with the Judiciary to ensure that the disputes are wound up expeditiously.

Mutula Kilonzo’s law firm is demanding Sh278,712,167.18 from NSSF as legal fees.

"This relates to a claim for legal fees for Mutula Kilonzo and Company Advocates for professional services rendered to the fund in regard to claims arising out of the termination of project agreement on South B housing project," states the report.

The Fund is also engaged in protracted disputes with Jirongo’s companies where they are both involved in claims and counter-claims.

One of the disputes involves Cyper International, Sololo Outlets and Mugoya over the construction of South "B" project known as Hazina Housing Project.

NSSF is demanding Sh4 million from Sololo for the project. Sololo went ahead to sue NSSF for designing the project to the tune of Sh27 million before demanding Sh4 billion for breach of contract.

They also want special damages to the tune of Sh1.9 billion for the breach of the above contract. In the report there is also a case of a firm claiming Sh35 million from NSSF as legal fees.

Musau Trading as Musau and Company Advocates were among the panel of NSSF lawyers during the year 2000.

The law firm was purportedly instructed by the Fund to pursue negotiations with Central Bank of Kenya to release Sh1.2 billion in respect to Prudential Building Society which owed the Fund the said money.

"The lawyer has filed a bill of taxation in the sum of Sh35million," stated the report.

The Fund is also chasing Sh251 million from CBK, Shah Munge Partners Ltd and former Managing Trustee Ben Mtuweta.

The claim against CBK is breach of contract for re-discounting Treasury bill No 1471 without a proper mandate.

Shah Munge and Partners are being pursued for converting NSSF’s funds for their personal use, fraud and negligence. Also facing fraud charges is Mtweta.

Dr Kosgey sold land to NSSF for Sh174 million. The land, which was owned by Kenya Railways, was later gazetted as national monuments, states the report.

NSSF wants to recover Sh70 million from Sammy Boit Kogo who sold a potion of Ngong Forest to the Fund.

"At the time of sale, the defendant had full knowledge that the property was incapable of getting transferred but nonetheless proceeded to purport to transfer it to the Fund," the report says.