After aggressive marketing and profit guarantees, John Opanda invested Sh5.4 million in Goldenscape Tree Africa Limited as he waited to see his business venture earn more than 10 times the initial capital.
To sweeten the deal, Goldenscape would give another acre of land to any investor, and plant fruit producing trees on the property. Buy one, get one free.
The fruits would start to blossom after two years, and each acre would fetch produce worth Sh1.8 million. After eight years, the trees would bring in Sh4.4 million. Goldenscape would take a 10 per cent commission from the money made.
This means for a paltry Sh455,000 investment, each investor would rake in Sh5.58 million after ceding the management fee. A management fee of Sh687,000 was also charged to each investor.
Plant produce has often been dubbed green gold, and Mr Opanda knew he would reap serious profits if he quickly boarded the train.
The businessman bought 12 acres, which in reality was double the size owing to Mr Wangai’s sweet buy one, get one free deal. For Mr Opanda, this meant that after eight years, he would have made a cool Sh57.8 million.
Today, Mr Opande should have banked Sh19.4 million from his fruit farming business after paying the 10 per cent commission to Goldenscape. He would be waiting for another four years to bank Sh47.5 million.
But reality struck. Mr Opande and at least 80 other investors are yet to receive a single cent from Goldenscape, despite the fact that the fruit farming proceeds should have started reaping profits in 2019 as per their contracts.
The investors had fallen into what courts have been asked to determine if it was a s fraud scheme.
The group of 80 has now sued Goldenscape Group and its owner, Peter Muriithi Wangai, claiming Sh570 million that they were promised in the tree and fruit farming venture.
Aside from seeking recovery of their investments and the promised returns, the group has put to the test chances of disgruntled investors getting reprieve in the event that fraud or non-performance botches big money business deals.
In their court papers, the group says that it invested over Sh54 million in Goldenscape Trees Africa Limited, a subsidiary of Mr Wangai’s Goldenscape Group Limited, between 2017 and 2019. Neither of the two Goldenscape firms nor their owner, Mr Wangai, has responded to the suit.
“The plaintiffs aver that under the contracts, the defendants were obliged to supervise and manage the acreage of trees so leased by the particular plaintiff, procure the services of a forester who would tend to the tree plantation so leased by the particular plaintiff; provide bi-monthly updates on the status of the trees planted to the investing plaintiff; procure tree insurance, and market and sell the trees and fruits,” the group says.
The investors have asked the courts to find that the tree and fruit farming venture as promised by Goldenscape is a con, while ordering for a refund of their investments and the Sh516.4 million that they would have made in profits as per contracts signed with the embattled firm.
The suit is likely to turn the screws on Mr Wangai, who is facing criminal charges for allegedly using a fraudulent greenhouse scheme to defraud over 1,000 investors of at least Sh1.5 billion.
In the greenhouse venture, Mr Wangai asked investors to pay for greenhouses, and his company would grow plant produce.
At maturity of the produce, the Goldenscape Group would then market and sell the produce, and remit profits to investors’ bank accounts.
Much like the tree and fruit farming venture, several Kenyans lost their investments as they received unending excuses on delays in getting their promised returns.
High Court judge James Wakiaga in June froze assets owned by Mr Wangai and his two companies pending conclusion of the criminal trial.
This means that the 80 investors seeking Sh570 million in the tree and fruit farming venture will have to hope that the criminal trial is quickly dispensed with in the event that their case succeeds, so as to open the door for recovery.
Most of the 80 investors bought one parcel of land. A few like Mr Opanda, Leelavantiben Mahesh Patel, Salome and Simon Kimathi bought several pieces of land in the hope that they had secured funds for future use.
With little to show on the ground, the investors now risk learning a very expensive lesson in investment.
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