Equity Bank set to auction Vihiga MP’s home over Sh19m loan

Vihiga MP Yusuf Chanzu and his wife have lost an appeal to stop Equity Bank from auctioning their home over a Sh19 million debt.

Justice Mbogoli Msagha refused to stop the auction slated for today morning unless Mr Chanzu and his wife can raise security of Sh19 million before fall of the auctioneer’s hammer.

Jamila Oyoo Chanzu, the MP’s wife, sued the lender to stop it from selling the house to recover the debt her husband borrowed in 2007 on behalf of a firm—Capital Construction.

Ms Chanzu had asked the court to stop Equity from selling the property for 45 days to allow her time to post Sh19 million security in court as the fresh case proceeds.

But Justice Msagha held that her husband’s previous default on payment provided doubt as to whether the money will be paid.

Mr Chanzu has previously unsuccessfully sued twice in the High Court and once in the Court of Appeal over the property.

“Although the parties are different, their relationship compels the court to observe that there having been a default on the husband, there is no guarantee that the spouse will honour the undertaking. The Court of Appeal having declined to issue a stay, it is not within this court to reverse the matter. I shall allow Ms Chanzu to post the security any time before the fall of the hammer,” Justice Msagha ruled.

The MP was to pay back the loan with 18 per cent interest and an additional six per cent on default. He later claimed the property was fraudulently charged to the bank.

He also accused the bank of contravening the Banking Act, saying the Finance minister did not authorise the rate of interest applied to the loan.

He further alleged that after variations and restructuring of the loan by Equity and the contractor without his approval, his guarantee was fully discharged.

Equity denied that it charged the property without Mr Chanzu’s authority or had charged interest rates that contravened the Banking Act. It urged the court to dismiss the suit with costs.

The lender says in response to Ms Chanzu’s application to stop the auction that it is prepared to stop it if she or her husband deposits the Sh19 million security.

The bank says Mr Chanzu has in the past agreed to deposit Sh19 million in court to stop the auction but failed to do so.