Kenya Insights

Tag: ABC Bank Group

  • Muhoho Taken To Court By ABC Bank Over Sh107M Debt

    Muhoho Taken To Court By ABC Bank Over Sh107M Debt

    Arguably one of the richest people in Kenya, former Kenya Airports Authority (KAA) Director General George Muhoho has been sued over a Sh 107 million debt that was advanced in 2019.

    According to the suit before commercial court, African Banking Corporation (ABC Bank) against Muhoho and Westminster Ltd, the firm borrowed Sh52 million. However, the firm has failed to honor its end of the bargain. The amount has now accumulated to Sh107 million from the interests.

    “The second defendant (Westminster) has since failed to make the requisite payments to service the loan facility as it is obligated to do so in terms of the letter of offer dated August 7, 2019,” claims ABC in its court papers.

    The bank says Muhoho has been adamant in handling the matter, they’ve been reading the silence as a signal of unwillingness to pay the loan. “The continued state of default has become unsustainable and the plaintiff seeks to sell the property under informal charge in order to recover the outstanding amounts it is owed by the second defendant,” suit says in part.

    According to the court document, Westminster allegedly agreed to borrow the money at an interest of 14.25 per cent per annum.

    The bank states that the amount continues to attract interest at a 24 per cent default rate yearly. ABC’s Legal Manager Kajuju Marete in his supporting affidavit stated that Westminster inked the loan deal on August 7, 2019.

    Kajuju explained that ABC agreed to advance the firm money after Muhoho deposited the title as security. He claims that ABC holds the original title.

    “The second defendant has defaulted on the loan facility and is currently indebted to the plaintiff to the tune of Sh107 million as of January 31, 2023,” claims Kajuju.

    Kajuju now says even with a notice that Muhoho’s property would be sold, he allegedly never responded. “To date, no response has been made by the first defendant (Muhoho) nor has there been any attempt by both defendants to pay the outstanding amounts owing and due to the plaintiff out of the loan facility,” his affidavit reads.

    According to the agreement before the court, Muhoho shoulders legal fees incurred by the bank while seeking to recover its money.

    “The borrower will reimburse the bank on demand for all expenses incurred on their account as set out above, as well as for all expenses such as repossession charges, valuation charges, storage fees, investigation charges, legal fees… under this letter or the security,” the letter reads.

    The bank wants the court to allow it to auction the land and have Muhoho and Westminster pay the costs of the case.

    Muhoho is also a former Juja Member of Parliament and a diplomat. He is the brother of Mama Ngina Kenyatta and former President Uhuru Kenyatta’s uncle.

  • How A Loan From ABC Bank Group Has Turned Into A Nightmare For City Businessman

    How A Loan From ABC Bank Group Has Turned Into A Nightmare For City Businessman

    In 2013, David Sila Onyango used his family house valued at Sh60,000,000 as a collateral for a Sh13.6M loan from African Banking corporation limited (ABC) bank in which he was acting as a guarantor for a ABC bank client.

    According to his statement seen by Kenya Insights, the Sh 7Million and Sh 6.6M OD facility advanced to Highflash Investment and Consultancy Libra House branch.

    Initially, things went as planned, Highflash supplied goods to UNHCR ( sanitary pads ) worth Sh 6.6m which they were paid through ABC bank kes 8.2m and it is from here that he claims things started going wrong. “Instead of ABC retiring the OD facility they turned it into a term loan without me
    being involved as a guarantor involved.” He says in his statement.

    High flash walked out of the deal leaving the loan unserviced. Being the guarantor of the loan and his property in line, he was left alone to deal with the bank and had to fight to save his family home which he used as security.

    He claims the bank coerced him into selling the property to settle the loan. He however opted not to do so and instead worked on a payment plan for the bank to recover the loan.

    From the initial Sh13.6M loaned, he says he’s managed to pay Sh8.6M leaving with a balance of Sh5M only to clear the debt. However, he accuses the bank of being impatient and frustrating his efforts by going ahead to put up his property on sale.

    As if that’s not enough, he’s accusing the bank of undervaluing and selling his land at a throwaway price of Sh38M while he had found a buyer who had agreed to buy it at Sh58M only Sh2M short of the initial price.

    In a offer letter to Mr. Silas, a Mr. Peter Andala had offered to buy his property for Sh58M and the same was communicated to the bank.

    Offer letter.

    It came as a surprise to him that the property was sold to Metrokam Properties Limited, a company associated with Kasipul Kabondo MP Mr Charles Were Ong’odo for meager Sh38M leaving him wondering why the bank opted for a lower offer while himself had brought to the table a willing buyer with a higher price.

    Mr. Silas rushed to court to stop the imminent eviction of his family from the property. On 20th September, Lady Justice Kiamongoi of Environment and Land Court, Milimani, issued an order of stopping the eviction.

    This was ignored and his family was evicted. In his protest to what he terms as injustice, he was thrown behind bars from where he sent the distress call to the media.

    There’s an ongoing case against banks and other financial institutions with auctioneers in the jurisprudence to be followed through ‘auctioning’ of properties.

    According to experts, the auctioneers rules and practice, like any other controlled practise in the country. No one can perform the duties of an auctioneer but only a legally licensed auctioneer through the auctioneers licensing board.

    Parliament enacted these laws to protect clients such as Mr David from illegally losing their properties through such deals. An auctioneers process provides a limit of up to more than 3months on immovable properties before selling through.

    A competitive process,and even, at the lapse of these dates,the auctioneer is still bound by law to offer the original owner first opportunity to buy back the property immediately its put on auction.
    An auctioneer is still bound by law,as a court officer to conduct themselves in a manner that befits a court official. This means that any order produced for or against the auctioneer will be respected and upheld.

    It remains unclear whether ABC produced a certificate of sale that effected the transfer if not this would deem the process illegal and unlawful.