Jubilee Secretary General Raphael Tuju has obtained temporary orders barring a regional bank from auctioning his property and proceeding with bankruptcy case over a debt of Sh 1.8 billion.
A bench of three judges ruled that Mr Tuju and his children have an arguable case that risks being made invalid if East African Development Bank (EADB) is allowed to continue. The bank has been pushing the Cabinet Secretary and his children Mano Tuju, Alma Tuju and Yma Tuju to pay Sh 1.8 billion with interest or have them declared bankrupt. EADB has also been fighting in Kenya’s court to enforce a UK judgment to seize Mr Tuju’s property under Dari Limited for sale.
Insolvency proceedings
The Tujus argued that they are likely to be subjected to insolvency proceedings over the disputed debt and jailed due to a contempt proceedings triggered by the failed financing deal. The court also heard that the bank would not suffer any prejudice because it holds security over the property in Karen.
Through Dari Limited and S.A.M. Company Ltd, Mr Tuju and his children have challenged the appointment of the receiver managers to run the property. Mr Tuju argued that the bank had filed separate cases with the ultimate plan of recovering money allegedly advanced to him.
Construction delays
The loans were meant for the construction of Sh100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.
However the development which features 12 luxury homes worth Sh1.2 billion fell behind schedule setting the stage for defaults and asset seizures. Mr Tuju and his children guaranteed the multi-million shilling loan, allowing EADB to suck them into the suit where it is seeking to take over the 20-acre prime property in Karen and the high-end hotel operated by the Tujus.
The Tujus have blamed EADB for the delayed construction of the Karen homes after the lender declined to provide additional cash for building the luxury houses in breach of the loan agreement. He also accuses EADB of stopping KCB Group from taking over the loan and derailing equity investments in the deal by Dubai investors.
“We find that the insolvency proceedings and the enforcement notices are all anchored on the UK judgment which arises from the debt instrument, that is, the facility agreement dated 10th April, 2015 executed by the parties. Therefore, unless the order of stay of execution and proceedings is granted, the appeal will be rendered nugatory,” ruled the judges.
