The National Bank of Kenya #ticker:NBK (NBK) could sell five parcels of land used as collateral to secure a Sh3.6 billion ($36.1 million) loan borrowed by a company owned by the late Mombasa tycoon Tahir Sheikh Said (TSS) after interim orders against the sale were discharged.
High Court Judge Patrick Otieno discharged the orders he had issued to Juja Coffee Exporters Ltd after it failed to pay Sh100 million, which was a condition imposed on July 13 for the orders to be extended.
The amount was to be paid within 30 days failure to which the orders were to be discharged.
Juja Coffee Exporters Ltd wants a temporary injunction issued pending hearing and determination of the application restraining the bank from interfering with its possession, marketing, advertising for sale, leasing, subdividing, receiving or taking possession of the charged parcels of land to secure the money as outstanding amounts.
The application by the company is based on the grounds that it is the owner of the five properties which were charged to the bank as collateral to secure a principal loan.
“A director with a major stake in the plaintiff (company) has since passed on and the surviving directors are willing to come to a structured settlement on repayment plan,” the application reads in part.
According to the company, the bank auctioneers had on February 16 this year issued a notice to sell the properties to secure the money plus Sh12 million with interest and other charges.
The company says following the demise of the principal director, the surviving directors embarked on the processes of putting the company’s affairs in order with a lot of difficulty, particularly in tracing documents which have not been forthcoming from the bank.
It further claims that the bank did not issue a Statutory Notice over the non-payment of any monies due under the charge to give it an opportunity to redeem or rectify the same within three months as required under the Land Act 2012.
Juja Coffee Exporters says the court has the power to declare the bank’s statutory power of sale unjustified.
“The only way to ensure the realisation of the loan facility in a manner that will not prejudice either party is by the plaintiff and the defendant entering into a negotiated agreement,” the submissions by the company states.
The bank, through its manager in the collection and remedial department Ms Fatuma Mohammed said Juja Coffee Exporters defaulted in meeting the financial obligations owed to the bank.