Kenya

Billionaires' curse: K1 sons in legal battle with mother over estate

Billionaires' curse: K1 sons in legal battle with mother over estate
  • The tycoon was proud of the success of his hotel business, perhaps the motivation for him to change his name two years before he died.
  • Police questioned Mr Kahama but were unable to link him to the failed coup.

Much like many other wealthy men who passed on before and after tycoon James Mwangi Kirung’o alias Kahama, his successful businesses have now wedged a thick grudge between his dependents.

The dependents have found themselves engaging lawyers to fight legal battles over control of properties worth billions of shillings.

The tycoon was proud of the success of his hotel business, perhaps the motivation for him to change his name two years before he died.

On September 6, 1996, the businessman legally abandoned his Christian name, James, and adopted Kahama — the same name he branded the successful chain of hotels that his family is now fighting over.

LONG ILLNESS

Despite changing his name, the tycoon, who died on March 20, 1998 after a long illness, has continued to be known as James Mwangi Kirungo even in court, where his dependents are fighting for ownership of multibillion-shilling properties. Some of Mr Kahama’s close friends knew him as JMK.

The tycoon’s success started with a bakery and a bar in Eldoret before he relocated to Nairobi in 1982 shortly after being released by police, who arrested him for allegedly being among planners of the attempted coup.

Much like many other successful businessmen who at the time had made antigovernment comments, Mr Kahama was suspected of funding campaigns targeting the downfall of President Daniel arap Moi’s regime.

And after the attempted coup by the Air Force in 1992, President Moi ordered for the arrest and questioning of such businessmen.

Police questioned Mr Kahama but were unable to link him to the failed coup. The businessman, terrified by the experience, felt it was best to leave Eldoret and instead pursue a life in Nairobi and avoid direct involvement in politics.

REMAIN UNITED

Mr Kahama likely believed that his family would remain united and expand the enviable business empire he had built, a belief supported by the fact that the tycoon’s will did not share out assets at all.

The court papers do not directly say what was in the will but confirm that he did not distribute his estate — the will only listed his assets and said he hoped his family would run the business as one unit.

After Mr Kahama’s death, things appeared to be well until 2011, when the tycoon’s wife and three daughters filed a case at the Eldoret High Court seeking control over what was left of the family estate.

The case was filed against Mr Kahama’s two sons. Eight years later, the battle rages and appears to be set to remain in the halls of the High Court for a couple of years to come.

Eunice, the late tycoon’s wife, and her daughters Hannah, Nancy, and Ruth, want the High Court to cut the cake that is the Kahama estate so that each member gets their fair slice.

While the will has remained a closely guarded secret, some of its contents have been revealed through the court case, which is pending determination before High Court Judge Stephen Murugu Githinji.

FAMILY ASSETS

The family assets are not modest by any comparison. Perhaps the most known asset they own is the K1 Klubhouse off Ojijo Road in Parklands, Nairobi. The property is estimated to be worth Sh500 million if placed on a conservative valuation scale.

K1 has stood the test of time and remains one of the most popular entertainment spots in Nairobi. Its success prompted the family to open a second branch along Baricho Road in December, 1999, which they named Klubhouse 2.

But K2 was closed down a couple of years ago. In a past interview with the Business Daily, Sammy Lonce Wakaina, one of Kahama’s sons, said the club was closed over failure to secure a lease renewal from the landlord.

The Kahama hotels in Nairobi and Mombasa and the Small World Country Club off Mombasa Road are the other hospitality ventures at stake.

The family also owns a 100-acre farm on Mombasa Road, a residential house in Parklands, an apartment in Kilimani, two pieces of land near the Jomo Kenyatta International Airport and two others in Nyahururu.

But the only shareholders in the family business are the Kahama sons — John Kirungo Mwangi and Sammy Lonce Wakaina — and their mother.

Stephen Mwaura, another son Mr Kahama, died in 2017. Stephen was a PhD graduate but returned home from the United Kingdom after his studies to join the family business.

Stephen’s wife has since inherited his shares in the family business.

Kahama’s widow says in court papers that her sons have threatened to evict her from her matrimonial home, and excluded the women in the family from ownership of the vast estate, whose value is estimated to be over Sh2 billion.

But Kahama’s sons claim that their mother has locked them out of the family office in Parklands.

Last year, Kahama’s widow asked the High Court to allow her daughters to take over her fight for distribution of the family’s assets. Eunice argued that she is now elderly. She also wanted her three daughters to substitute her as the administrator of her husband’s estate.

But High Court judge Stephen Githinji agreed with her sons when ruling that switching administrators is a power that lies in the beneficiaries of a particular estate.

CIVIL SUIT

“Eunice sues in civil suit number 126 of 2012 as the administrator of the estate of the late James Murangi Kirungo. In the application, she intends to delegate the responsibility to Hannah Wangari Murangi and Nancy Wambui Mwangi.”

“Other beneficiaries of the estate may not be for the position. This may amount to imposing upon them administrators who are not of their choice. The law does not allow such. The application lacks merit and is hereby dismissed with costs to the respondents,” the judge ruled.

While the family fight has not led to wastage of the estate, the risk is now possible with calls to distribute wealth.

FRIDAY: Three sons of the late billionaire Mbugua Mwangi turn on one another over ownership of property estimated to be worth billions of shillings. The property includes Paradise Lost in Kiambu