Companies
Auctioneers shake billionaire David Langat’s empire over Sh2.1bn debt
Thursday July 13 2023
GRAPHIC | CHRISPUS BARGORETT | NMG
Billionaire businessman David Langat’s empire was this week thrown into unfamiliar territory after auctioneers put up his tea estate in Nandi and office blocks in Mombasa for a forced sale to raise more than Sh2.1 billion owed to a local bank.
Popularly known as DL, the tycoon made his fortune running his empire from Mombasa and has vast interests in real estate, agribusiness, hospitality, and the energy sectors among others.
His troubles with auctioneers became public on Monday, drawing public attention to a man who has largely kept off the limelight.
He declined to give details about the auction notice when reached for comment.
“I am going to give you all the details and inside information on the happenings and the inside story at the DL Koisagat tea company in Nandi county,” he told the Business Daily on the phone. But he did not return calls afterwards.
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A source at Graham Investments told the Business Daily that they hope to sell the expansive tea estate at Sh1.9 billion in the forced sale to be held on August 1 at the auctioneer’s offices in Nairobi’s Westlands area.
The billionaire is considered a close confidant of President William Ruto. When Dr Ruto visited Kapsabet in March 2023 for prayers, he was among the leaders who accompanied the Head of State but he has since kept a low profile.
The Koisagat Tea group of companies based in Nandi Hills comprises land measuring about 1,342 acres, plants and machinery.
The auction notice stated that the land is developed with an exclusive tea zone for export-oriented commercial tea cultivation.
The estate also has 2.47 million tea bushes occupying 958.75 acres, 100,942 eucalyptus trees and 2,223 cypress trees.
“Other portions of the tea estate are under residential use (managerial houses and labour camps). Woodlots are periodically harvested to provide wood fuel to the tea processing,” the notice stated.
Mr Langat is among the businessmen from North Rift that backed Dr Ruto’s 2022 presidential bid.
He was recently named by the President to the National Investment Council and has invested in agribusiness, real estate, energy, and hospitality among others.
The tea estate also has two schools, Francis Kibet Memorial School and Koisagat Primary School, a factory section, a factory building, a storey administration building, estates and partnerships offices, a fuel station, a main store, factory workshop, a carpentry workshop and weighbridge office.
There is also a chemical store, factory washrooms, labour camps with shops, a social hall, managerial houses, guest houses, a swimming pool and a chairman’s residence.
“Water is sourced from at least three mini dams-reservoirs across the property and pumped to a central treatment point before being distributed and stored in the many concrete tanks and water towers,” the notice said.
The notice also announced the planned auction of Mr Langat’s properties in Shimanzi in Mombasa town, registered under the name of Koifan Developers Ltd.
The sale will be conducted on July 31 in Mombasa, with the auctioneer hoping to raise Sh200 million from the sale.
The property comprises a 0.7-acre plot developed with a four-storey office block and five go-downs and is used for processing and packaging of tea products, among others.
The buyers will be required to deposit 10 percent of the purchase price in cash or a banker’s cheque at the fall of the hammer.
“A bidding deposit of Sh5 million for property no. 2 (the Mombasa property) and Sh10 million for property no.1 (tea estate) by way of banker’s cheque will be mandatory,” the notice said.
The tea estate has been listed in Mr Langat’s larger DL Group, which identifies itself on its website as having been founded by the tycoon over 30 years ago.
“The DL Group grew from its humble beginnings in the coastal City of Mombasa and expanded into the tea production sector through the DL Koisagat Tea Estate in Nandi County in the Great Rift Valley,” a statement on the website says.
The company further says it introduced purple tea at Koisagat Tea Estate in 2013 as part of its innovations.
“We learnt about it from Kenya’s Tea Research Foundation and didn’t waste time in planting it on about 100 acres. In doing so, we became one of the first Kenyan companies to start planting and eventually processing purple tea. We did this with one eye on the European and Chinese markers where purple tea is quite popular,” the firm says.
The Mombasa-based tycoon moved to Tanzania where he owned thousands of hectares of tea plantation during the tenure of President John Magufuli.
But he has since returned to Kenya, from where he runs his businesses spread across the region, other African countries and Europe.
The tycoon owns Nyali Mall in Mombasa, which comprises over 330,000 square feet of office space, shops, supermarkets, restaurants and showrooms.
Other than tea estate, the tycoon owns DL Farms, which the website states employ modern farming methods to ensure high yields in the safest manner both to the environment and its partners.
Mr Langat was a few years ago granted a licence to establish a special economic zone in Eldoret town in Uasin Gishu County.
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Within the zone, Mr Langat also seeks to establish what he calls an Olympia City, which will be home to hotels, a shopping mall, local and international schools, entertainment and recreational areas, a state-of-the-art hospital, modern hotels and up to 4,000 residential units.
