NBK gets nod to auction TSS land over Sh3.7bn loan

The Court of Appeal has cleared National Bank of Kenya (NBK)to auction property of the late Mombasa tycoon Tahir Sheikh Said-TSS over a Sh3.7 billion loan.

A three-judge bench ruled that Juja Coffee Exporters Limited---majority owned by TSS--admitted to taking the loan, arguing that a dispute over the size of the unpaid debt was not enough to stop the auction of the property in Lamu.

The TSS company took two overdraft facilities, pre-shipment and post-shipment facilities with NBK in 2013 and 2016 that were secured by the land as well as other securities but stopped making payments in 2015.

High Court put a freeze to the sale in April 2017 following a petition from the late Mombasa tycoon’s son, Tauhida Tahir Said, who disputed the amount of the unpaid loan.

“The claim that there was a contest as to the exact amount outstanding was also not a basis for restraining the Bank,” said the bench of justices Kathurima M’inoti, William Ouko and Gatembu Kairu.

“In restraining the bank from pursuing its remedies under the legal charge, the learned judge appears to also have been moved by the plea that one of the directors of the borrower, who was said to be the “mover” of the company and the principal director had died. Whereas the sympathy and compassion shown by the judge may be commendable, it was not a sound legal basis for exercising judicial discretion in the manner that he did.”

Juja Coffee Exporters took a Sh2.9 billion loan and registered it under Lamu Ginners Company Limited.

The billionaire defaulted on payments in December 2015. The loan had grown to Sh3.7 billion in principal and interest by April 2017 when the court stopped the bank from selling the property.