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Economy

Judge stops Trade Bank from auctioning Tana River land in Sh1bn loan case

Justice Said Chitembwe. PHOTO | FILE
Justice Said Chitembwe. PHOTO | FILE 

A judge has temporarily stopped Trade Bank Limited from auctioning 6,000 hectares of land in Tana River County to recover nearly Sh1 billion from a Nairobi-based firm.

Justice Said Chitembwe, sitting in Malindi, issued temporary restraining orders against Trade Bank Limited (in liquidation) interfering with the land that Coastal Aquaculture Ltd used as a collateral to secure Sh984,699,047.15 loan.

Mr Justice Chitembwe issued the orders against Coastal Aquaculture, Trade Bank Ltd, Keysian Auctioneers and National Land Commission listed as first, second, third and fourth defendants.

He ruled: “That a temporary injunction is issued on temporary basis restraining the defendants, their agents, servants and/or employees or anybody claiming through them be restrained jointly and severally from encroaching into, alienation, subdividing, selling, leasing or in any way dealing with the land parcel no 17601/2 Tana River district pending the hearing of this application,”

Kone Dertu Ranching Company Limited moved to the High Court seeking, among other orders, to block Trade Bank from auctioning the land.

This is after the bank last November issued a notice in a newspaper seeking to sell the land by public auction through Keysian Auctioneers to recover the loan it had issued to Coastal Aquaculture.

The ranch through Tana River County government legal adviser Siamito Sekeyian stated that it owned the land since 1975 and registered it as agricultural company before surveying and subdividing it for development.

In an affidavit sworn in support of the suit, the ranch chairman, Mr Abdu Mughana, further said they later applied for a title deed for the property at the land office.

“That however, the title has never been issued to date. Unknown to the plaintiff (ranch), the first defendant working in cahoots with the fourth defendant subdivided the sand land carving out about 6,000 hectares and for which a title was issued to the first defendant albeit illegally,” said Mr Mughana.

“That the first defendant, having the title and unknown to the plaintiffs used the title to obtain a loan from the second defendant…defaulted in repaying the loan and the second defendant has now instructed the auctioneer — third defendant — to sell the property,”

Mr Mughana said the property is ancestral land that holds immense value to communities in Nduru, Semikaro, Anasa, Mlimani, Marafa, Mbelenzoni, Shirikisho, Darga, Bura Moyo, Kibokoni, Ozi and Mpeketoni villages.

The case has been scheduled for mention on February 20.

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