Kenyans could lose more than Sh500 million after it emerged that Kenya Airports Authority granted its title deed as security for a bank loan to a private company.
Former KAA managing director George Muhoho is said to have signed a letter of consent to charge the authority on a Sh510 million loan advanced to Transglobal Cargo Centre by the Standard Chartered Bank.
This means that should the firm default, the property of the KAA will be attached to recover the money, including interest accrued.
Transglobal Cargo Centre, owned by business mogul Peter Muthoka, had an initial lease to build, operate and transfer the cargo handling facility at JKIA for 20 years but the agreement was extended in
August 2013 under unclear circumstances.
The KAA management led by new MD John Andersen was at pains to explain to the committee how the cargo handling firm managed to get a land rent number, technically assuming ownership of the parcel of land as a sub-division before survey.
“It is perplexing how a private company ended up getting a parcel of land at the KAA without a survey being conducted and then went ahead to take a loan and attached property registered under KAA,” committee chairman Adan Keynan said yesterday.
The management admitted that the land had no LR number because there was no survey done, which raises concerns that the firm could have fraudulently obtained the number to access the bank facility.
“As far as we are concerned the land belongs to the Kenya Airports Authority,” KAA company secretary Catherine Kisira said.
“It would be irresponsible to speculate on the issuing of the LR number because the KAA was not party to that.”