By Jakowiti Atwech
Jubilee Party Secretary-General Raphael Tuju is fighting back a court battle to block the auctioneers from his properties over a Sh1.53 billion ($15.6m) loan.
The East African Development Bank (EADB) filed a case before a London court over a Sh1.4 billion ($13.6 million) loan that Dari restaurant, which is affiliated with Jubilee secretary-general Raphael Tuju has defaulted.
Mr Tuju returns to the High Court Friday to know his fate after Justice Maureen Odero blocked the East African Development Bank (EADB) on December 24 from operating or selling assets the Cabinet Secretary had used to access the multi-million dollar loan.
The loan was meant for the construction of Sh100 million two storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.
But development of the 12 luxury homes worth Sh1.2 billion has fallen behind schedule in a business environment where property developers are finding it difficult to sell units that were built on loans, setting the stage for defaults and asset seizures.
EADB was enforcing the judgment by a London court that ruled that Tuju had defaulted on the multi-million dollar loan, which includes the principal and interest.
Mr Tuju received a seven-day order last week which lapses Friday, stopping the receiver managers from taking over the property, arguing that EADB was frustrating efforts to have ZLivia invest in the property.
“In complete disregard of the deliberate efforts by the plaintiffs (the Tujus) to return the project on profitable trading, the defendant (EADB) has proceeded to appoint receiver managers over all the assets of the plaintiff to engage in the sale and realization of the plaintiff assets and properties as its primary option,” Mr Tuju said in court papers filed on December 24.
The bank claims the loan was issued back in July 2015 at Sh951 million ($9.19 million) and has since accrued Principal and loan interest. The loan has been defaulted since 2017.
The London court dismissed Dari Limited’s opposition to the bank’s claim, setting the stage for the lender to seek enforcement and auction.
The London court’s documents showed that the restaurant had entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a $9.3 million (Sh943.9million) loan.
The deal gave the restaurant a 24-month grace period, which fell due in 2017.
But two years later, Dari had failed to pay $1.8 million (Sh186 million) in interest owed, according to the bank, adding that Mr Tuju had ignored a notice to clear the debt.
EADB accused Dari, where Mr Tuju and his children who include Tuju’s children Mano Tuju, Alma Tuju and Yma Tuju are directors, of breaching the debt agreement and defaulting on the loan.
Mr Tuju has opted to fight the battles in the Kenyan court and accused EADB of breaching terms of the loan deal, which made it difficult to complete the high-end real estate project.
The Entim Sidai luxury homes development comprised five bedroom homes worth Sh100 million each. They have two jacuzzis in two master bedrooms with a translucent roof that lets in natural light where families live next to century-old trees and the historic bungalow.
The Victorian bungalow currently operates as a spa and restaurant with rooms to let. There is one room for honeymooners that goes for Sh43,000 a night.
Mr Tuju accuses EADB of stopping KCB Group from taking over the loan and derailing equity investments in the deal by Dubai investors.
Mr Tuju, who made his wealth from the media business, has invested heavily in real estate.