News
Auctioneers After Raphael Tuju’s Properties Over Botched Sh1.53 Billion Loan
Jubilee Party Secretary-General Raphael Tuju has moved to the courts in an attempt to stop the auctioning of his properties used as collateral to acquire a Sh1.53 billion ($15.6m) loan that was meant to be used to develop luxury homes in Nairobi’s Karen suburb.
The debt, which was advanced to mr Tuju on July 31, 2015 at $9.19 million (Sh932.7m), has remained in default since 2017 when it fell due.
On December 24th, justice Maureen Odero ordered the East African Development Bank (EADB) against operating or selling the assets the Cabinet Secretary had used to access the botched multi-million dollar loan. EADB had already appointed receiver managers (George Weru and Muniu Thoithi) for the Tuju property under Dari Limited to prepare for the sale of its assets to recover the Sh1.53 billion debt.
Of the loan, Sh100 million was to be used to construct a 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.
With the surplus in the real estate sector, development of the 12 luxury homes worth Sh1.2 billion fell behind schedule in a business environment where property developers are finding it difficult to sell units that were built on loans, leading to defaults and assets being auctioned.
Mr. Tuju had argued EADB was frustrating efforts to have a Dubai-based investor (ZLivia) invest in the property to make it profitable. “In complete disregard of the deliberate efforts by the plaintiffs to return the project on profitable trading, the defendant 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.
Mr Tuju was awarded a seven-day order, up to Friday, that stops the receiver managers from taking over the property, after which he will return to the High Court Friday to know his fate.
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