Logistics firm Oceanic Oil Limited has sued Standard Chartered Bank to stop the sale of four parcels of land which the lender wants to dispose of to recover a disputed Sh456 million loan.
Oceanic Oil holds that Standard Chartered in 2011 failed to release the entire amount it borrowed to build offices, a convenience store, a fuel depot and petrol stations in Eldoret and Kisumu.
Some of the funds were also for the purchase of a maisonette in Lavington and to add to the firm’s fleet of tankers to transport oil in Kenya, Uganda, Tanzania and Rwanda.
The oil transportation firm adds that its planned projects have stalled because of Standard Chartered’s failure to release the entire Sh335 million it was to borrow.
Oceanic Oil insists that it has been servicing the loan but Standard Chartered has now slapped it with a Sh456 million demand. It adds that the lender has refused to furnish Oceanic Oil with a statement of its loan account for reconciling of figures.
Standard Chartered is yet to respond to the suit.
Oceanic oil says the stalling of its projects held back the opportunity to benefit from business returns that would have been used to repay the bank loan.
“Standard Chartered did renege on its obligations in disbursing the funds for financing the construction projects despite the clear agreed terms thus causing the project completion date to delay.
“Despite Standard Chartered mismanaging the accounts, they sent us demand letters on August 22 demanding an outrageous and grossly exaggerated sum of Sh456 million,” says Oceanic Oil in court papers.
Oceanic Oil director Joseph Karoba has also accused Standard Chartered of changing the interest rates on the loan without informing his firm.
He wants Justice Farah Amin to order Standard Chartered to either provide supporting statements of account to verify its Sh456 million demand or recalculate the entire amount owed to the lender.
Mr Karoba also claims that the lender sent demand letters with conflicting figures between June and August, which he wants the lender to account for.
“These conflicting figures were not explained and we requested Standard Chartered to provide us with account statements to ascertain whether indeed we owed them any arrears.
“We have tried seeking audience with the defendant but we have not been given an ear.
“In an effort to cover up their own mess they have now started demanding payment of hefty sums of money,” Mr Karoba adds.
Oceanic Oil claims that Standard Chartered’s demand is intended to intimidate the firm into paying up before irregularities are spotted in the handling of its loan account.
The firm adds that Standard Chartered has never offered it a reason for cutting disbursement of funds midway through its construction and asset acquisition projects, and that it has never been furnished with a copy of registered charge instruments for the security it offered.
StanChart Kenya reported a loans default rate of about 12 per cent as at third quarter of this year.