Just three years after his death, Njenga Karume’s monumental estate has run into deep financial problems that have seen the shutdown of key flagship ventures that he built over six decades and strict financial cuts to his beneficiaries.
In an enactment of a crumbling empire, shrouded inclaims and counter-claims of betrayal, greed, and mismanagement, the People Daily has come into details of how the late Karume’s business and real estate edifice is melting down.
Details availed by family members indicate that the Njenga Karume Trust (NKT), into whose hands he left the management of his vast estate on behalf of his family, has ran into debts estimated at Sh400 million.
At the time of his death 37 months ago, the estate was said to be worth over Sh40 billion and debt-free. But, according to documents that family members have shown the People Daily, the Trust has now warned family members to brace for tough times ahead, citing “financial constraints.”
It also emerged that apart from closure of facilities that have ran aground, the Trust has also resorted to selling some of the properties to raise funds to meet the beneficiraries’ entitlements.
The situation sounds quite unlike the rosy scenario Karume narrated in hisbiography, ‘Beyond Expectations: From Charcoal to Gold’. Family members, whose expectations have apparently been dashed, said in an exclusive interviewthat eighty pedigree cows had already been sold as well as five prime properties worth Sh96 million without family consent.
Karume had four daughters and four sons.In a memo to the family issued by the Trust towards the end of December, last year, and followed by immediate suspension of monthly allowances disbursed by the Njenga Karume Trust to all beneficiaries, the Trust advised that it had effectively become broke.
“Due to inherent cash flow constraints, due to lower than expected performance of the three holding companies, resulting in non remittance of dividends, the NKT regrets that it will not disburse the monthly allowances to the beneficiaries with effect from December, 2014,” the memo stated.Village Inn, an establishment in Kiambu town closed shop two years ago in unexplained circumstances as did the prime Indian Ocean Beach Club at Diani, South Coast.
The Trust said then this was to allow for “renovations”.Yesterday, the up market Pizza Garden and neighbouring sister Jacaranda Hotel at Westlands, Nairobi, shut their ornate doors. Two of Karume’s daughters, Lucy Karume and Jane Mukuhi protested the closures.“They are closing our father’s businesses on flimsy reasons, a clear attempt to bring down the empire.
Pizza Garden was making Sh200,000 shillings per month but they have now closed it down without warning,” said Lucy. The People Daily crew who visited Pizza Garden in the morning witnessed couriers removing furniture and other assets from the restaurant. Lake Elementaita Lodge has also reported poor business but remains in operation.Karume’s daughters yesterday broke down in tears while explaining the challenges the beneficiaries of their father’s estate were facing.
They claimed, besides incurring debts in loans and trade-offs against best practices, the Trust had badly mismanaged a section of their property.“Mzee (Karume) was keen that his funds are used prudently. He was keen that priority should be for the education of his grand children, but this is now at stake,” Lucy and Mukuhi said in aninterview.“My uncle’s children are emailing from the United Kingdom begging money for school fees and food,” Lucy said while accusing the Trust of “spitting on the legacy of my father.
”“They are attempting to bring down what a man with zero education accomplished over decades through sweat and tears,” a weeping Jane added. The daughters maintained they would respect judicial decisions, but appealed to the courts to help them safeguard their father’s legacy. In its memo, the NKT said: “The Trust will give priority to the payment of medical cover, school and university tuition fees and upkeep, and accommodation expenses for the beneficiary students attending universities and colleges.
”It advised that the payment of the monthly allowances would recommence “as soon as the cash flow situation improves.”In order to fulfill these commitments, the Trust whose members include Ngugi Waireri, Henry Waireri Karume, Margaret Kamithi and Kung’u Gatabaki is dependent on the revenue streams from the businesses it owns which are consolidated under the three holding companies namely, Jacaranda Holdings Ltd (JHL), Karume Holdings Ltd (KHL) and Cianda Holdings Ltd, (CHL).Insights into the challenges, the Karume empire is facing first came to light through a court case between some of the Karume children and members of the Trust he formed to oversee the vast estate.
The battle exposed what was being described in court documents as “mismanagement and vandalism” of theestate allegedly executed by the trustees in whose hands Karume left his multi-billion-shilling properties.Karume, a former Cabinet minister and close confidant of retired President Mwai Kibaki, initially reportedly wrote a willdated February 19, 2009, which he revoked and replaced with a new one where he formed a trust in June, 2011, about eight months before he died.
But how did the empire of the one of Kenya’s richest men come down crumbling only 23 months after he died?When he succumbed to illness, Karume bequeathed his kin multimillion properties turning them into overnight millionaires.
His will transferred of all his worldly assets to his closest kin, with his then four-year-old son Emmanuel Karume Njenga set on a straight path to billionaire status.Karume reportedly also swore under oath in front of his long trusted physician Dr Dan Gikonyo of Karen Hospital and Bishop David Kamau, to ensure his vast estate was divided according to his wishes.Karume who, according to his autobiography built his multi-billion estate from scratch, died aged 83 after a long battle with prostate cancer.
- People Daily