2015.10.22 tatu city majority shareholders reassert control over project v3

1. EMBARGOED UNTIL FURTHER NOTIFICATION ON 22 OCTOBER 2015
Tatu City majority shareholders reassert control of project
22 October 2015
Summary
After four years of spurious lawsuits and other attempts by Kenyan minority shareholders to thwart and
extort Tatu City Limited, the project’s majority shareholders have taken decisive steps to protect their
investment and proceed with the 2,500-acre mixed-use, mixed-income development near Nairobi.
The actions of the Tatu City Limited board, carried out in full accordance with corporate governance
and Kenyan law, ensure that Nahashon Nyagah and Vimal Shah, who have invested almost no money
in the project, can no longer block the creation of tens of thousands of jobs and homes at Tatu City.
Background
On 16 Sept 2015, all Tatu City Limited directors participated in a board meeting held at Tatu House,
located on the project site, to discuss the circumstances that led to the High Court (Milimani) Civil Case
No. 46 of 2015.
During the course of that meeting, the board decided by majority vote with all directors present that
Nelson Havi of Havi & Co Advocates could not represent Tatu City Limited. The decision was taken
because Havi was never appointed by the board to represent the company; rather, in collusion with
minority directors Nyagah and Shah, Havi illegally, inconceivably and with no authority whatsoever
committed Tatu City Limited (and Kofinaf Limited) to be part of Case No. 46 of 2015.
The board members could not fathom how a lawyer not appointed by the board could file a lawsuit
against the company’s majority board directors who have provided all of the financing for the project.
Moreover, the lawsuit was filed with the support of minority directors Shah and Nyagah, who did not
consult with the board before instructing Havi to file Case No. 46 of 2015. Havi, Shah and Nyagah also
stated falsely to the High Court of Kenya that they had authority to file Case No. 46 of 2015.
Board & Majority Shareholder Actions
In order to correct this perversion of corporate governance and abuse of the judiciary, the Tatu City
board has taken the following decisions:
1. Appointed Ahmednasir Abdullahi, of Ahmednasir, Abdikadir & Co Advocates, as the legal
representative of Tatu City Limited (and Kofinaf Limited).
2. Instructed Mr Abdullahi to withdraw Tatu City Limited (and Kofinaf Limited) as plaintiffs in Case
No. 46 of 2015. Accordingly, as of 22 October 2015, neither company is party to Case No. 46
of 2015.
3. In response to requests by Nyagah and Shah, the board distributed an audit conducted by EY
of the project’s major loan facility. Nyagah and Shah repeatedly insisted on using PwC Kenya
for such an audit, but that firm was found to have a number of conflicts of interest related to its
long-term relationship with Bidco, of which Shah is CEO.
4. For absence of doubt, meeting on 22 October 2015 the board ordered an additional
independent audit of the loan facility, to be carried out by a reputable international auditing firm.
o Despite their public claims that the majority shareholders are blocking such an audit,
Nyagah and Shah have ignored the majority shareholders’ repeated offers to hire any
firm (except PwC Kenya) to audit the loan facility.
o Nyagah and Shah’s claims that Tatu City’s majority directors have refused to agree to
an audit of the loan facility are undermined by the minutes of the 16 September 2015
board meeting, which Nyagah and Shah themselves submitted as evidence in a court
motion brought by Nyagah and Shah. In the minutes, Tatu City director and majority
shareholder Stephen Jennings states:
“… I welcome a discussion at this time about an audit. That is a very valid point.
So, the majority shareholders would like to undertake and audit. We have

2. agreed to it previously and it has been administered previously. We are happy
to work with any recognized international audit firm in the world with the
exception of PWC Kenya. So that gives many, many choices. … So, Vimal, if
you want an audit, let’s appoint EY, KPMG, Deloitte, okay? Let us agree on
proper terms of reference and let us start the audit. We welcome that. As you
know, we have never tried to resist having an audit. So would you like to start
an audit?” (Vimal Shah does not respond)
o Despite their claims to the contrary, Nyagah and Shah, as board directors, have been
repeatedly briefed on the status of the loan facility and agreed to it in board meetings.
o Rendeavour, the majority shareholder in Tatu City Limited, has proposed to Shah and
Nyagah a “path to zero” to reduce the debt. A number of suggestions were put forth
which Nyagah termed “utter madness” in an email.
More Spurious Legal Filings by Nyagah, Shah and Havi
Nyagah, Shah and Havi have made applications to the High Court to have Ahmednasir Abdullahi struck
out to represent the plaintiff companies Tatu City Limited and Kofinaf Limited, based on spurious claims
that Nyagah and Shah had previously agreed to work with Mr Abdullahi. Mr Abdullahi has made a clear
statement in court that Havi and Nyagah had approached him to request he manipulate Justice Farah
Amin to rule in their favour in February 2015. Mr Abdullahi refused, and therefore never worked for
Nyagah and Shah. Thus, this application is baseless.
The group has also made an application to the High Court, arguing that the 16 September 2015 board
meeting which they attended was held in contempt. Because the plaintiffs themselves attended the
board meeting, their application is baseless.
These are the latest examples of Nyagah, Shah and Havi’s attempts to confuse the courts and public
in order to extort money from Tatu City’s majority shareholders.
Criminal Case Proceeds
Nyagah and Havi remain under criminal investigation by the CID of the Kenya Police in regard to their
attempt to steal over 2,000 acres of land belonging to companies associated with Tatu City Limited (but
not part of the satellite city development). According to media reports, the CID recommended to the
Department of Public Prosecution that Nyagah, Havi and more than a dozen relatives and associates
of Nyagah be charged with fraud. The case file is now being reviewed by the DPP.
The CID and DPP have lawful authority and constitutional powers to investigate the commission of any
criminal conduct. It is against public policy to stop that process. The law allows criminal and civil cases
to be prosecuted concurrently. The law also envisages such a scenario.
Investment in Tatu City Limited
Nyagah has not invested any money in Tatu City Limited. Shah made a one-time investment of
$289,000, which represents less than 0.3% of the project cost. Meantime, the international shareholders
have invested over $100 million in Tatu City.