KEY ENDORSEMENT: Classic FM presenter Maina Kageni (2nd left) at Brian Gacari's all-white wedding
NAIROBI, KENYA: Hordes of distraught investors are walking out of a too-good-to-be-true kind of plan that had promised huge profits twice a year.
Even worse, some land buyers claim to have investigated and found that the parcels they paid for are not even owned by the seller, Property Reality Company (PRC), which has claimed innocence.
Overzealous salespersons and endorsement by a popular radio presenter (Maina Kageni of Classic FM) drew thousands of investors, mostly women, into the plan that now seems to be falling apart.
PRC, a land-selling firm that has since branched out into an agricultural production management provider, lured buyers with the promise of huge returns.
Investors were only required to purchase plots of land and greenhouses from PRC, leaving the firm to grow high-value crops such as tomatoes and pay Sh250,000 every season. A plot and a greenhouse would cost Sh550,000, meaning that the investors would recoup their money in about 18 months.
The firm marketed it as a 'farming community' scheme, ostensibly because the parcels of land are not readily habitable as they are far from major towns. Tens of investors who bought into the plan told The Standard they never received a cent and are now devastated after taking out bank loans to buy into the scheme.
Many are yet to receive land ownership documents several years on, much less the promised returns, while attempts to get refunds on the investments have been futile. "It has been one year of painfully paying back a loan which I am struggling with yet the company is existing and making profits," a distraught investor named Joy wrote in an emailed complaint.
Joy's pain is shared by tens of other complainants. "I bought land at the Aberdare 3 (one of PRC's projects) with the greenhouse it costed (sic) me Sh550,000 and until now they are not responsive, they are giving me excuses," another aggrieved customer wrote. She added that her attempts to secure her title deeds for the two plots have been futile.
Betty, another investor whose complaints were sent to the consumers' lobby Cofek, indicates the land she had bought was registered in the name of an entity other than PRC. She shared her frustration indicating that she had never bought land before, prompting her to seek counsel from her friends.
Betty's due diligence uncovered the plot she had already paid for was part of a bigger parcel that bore different ownership details other than PRC's.
But her decision to abandon the investment by demanding a refund of the price she had paid only helped start another round of frustrations. Several visits to the firm's offices, phone calls and emailed conversations showed the hesitation by PRC to make refunds.
In yet another parcel of land in Kajiado, one of the buyers paid for four plots in 2013 but the firm has only provided ownership documents for one.
Other customers are yet to receive their title deeds to date. Delays in subdivision of the land, the company claims, have meant that the title deeds cannot be processed.
One of the firm's directors held a fancy invite-only white wedding earlier in March on the beach that was graced by several celebrities.
Brian Gacari, 32, the chief executive of PRC, sought to explain the situation his four-year-old company is entangled in. He told The Standard in an interview that his firm had given out "thousands of title deeds" and for the few that were outstanding, the delays were a result of factors beyond him.
"Some processes in Government offices take very long but we have been lucky a few times and got title deeds within a day," Mr Gacari said. He added that PRC was only a victim of Government red tape but he had managed to receive another set of land ownership documents that would be given out next week.
On the greenhouse project, Gacari said his firm may have been over-ambitious initially in promising Sh250,000 per crop season, but the contracts were replaced with a more modest and realistic Sh100,000, which he said was still "very lucrative".
A total of Sh25 million has already been paid to investors who bought into the greenhouse farming project, Gacari claims, adding that it was unfortunate that a few unintended delays could be interpreted as failure.
"We have the best practices possible as a company," he said, adding they had enough funds to refund any aggrieved buyers "in the coming months". Cases related to land or property fraud have been on the rise.
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