BY CHARLES MULILA
Administration Police houses that went up in flames on Monday are located on a controversial plot allocated to a firm associated with a powerful cabinet minister from the Rift Valley province. The plot, LR number 209/13332 was allocated to Rosestar Properties Limited, whose directors at the time of formation were listed the minister and and a Mr.Jamal. Rosestar then used the plot as a security to secure a Sh.200 million overdraft at the collapsed Trust Bank limited in 1996. During the Monday inferno, scores of people were injured and goods worth millions of shillings destroyed.

Two years ago, property worth millions of shillings was burnt at the same property. Investigators are yet to unravel the mystery of the fire then, and now.Interest on the overdraft has since accumulated to a whooping Sh.1.2 billion, according to an official at Central Bank of Kenya who declined to be named. The debt is being chased by the Central Bank's DPF department. Documents obtained by the Business Times show that the said a firm associated with the individual procured a Sh.200 million loan from the collapsed Trust Bank Bank and offered Government land as collateral. The land in question, LR number 209/13332, valued at Sh.500 million by October 1996 is owned by the Office of the President. But is also claimed by Rosestar. The partner however resigned on 14th January 1997, after the firm secured the Sh.200million from Trust Bank.

The money was wired to the firm on 11th November 1996, a letter written by then Trust Bank officials in our possession shows. It is believed that the loan, and many others advanced to politically correct individuals led to the ultimate collapse of the bank, in which billions of savings were sank. The bank collapsed in 2001. 

Before it went under, frantic efforts to recover debts by the Central Bank of Kenya(CBK) appointed statutory manager Rose Ndetho yielded no results. In January 2000, Ndetho wrote to the minister and other directors of the firm in question demanding Sh.545,786,606, as principle and accrued interest from the debt. Detho's letter said in part..”We are concerned that you have not responded to our demands to settle this account…if we shall not have heard from you within seven days from the date here of, we shall proceed as appropriate without any further reference to you”, Detho's hard hitting letter said. Communications in our possession indicates that earlier correspondence between the then PS incharge of Provincial Administration and Internal Security Zakayo Cheruiyot and the firm associated with the minister had been exchanged.