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Transport firm faces auction over Sh245.5 million NCBA debt

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NCBA branch in Nairobi. FILE PHOTO | NMG

NCBA Bank #ticker:NCBA is seeking to be allowed to recover the debt owed to it by a Mombasa-based transport company, its directors and two firms that guaranteed the defaulted Sh245.5 million loan.

The bank wants the High Court in Mombasa to rule in its favour against Shiva Carriers Ltd, Jagged Alliance Ltd and directors Deepak Madan and Raveej Deepak for failing to appear or file a defence in its petition seeking to repossess property.

The lender also wants Springbank Investment Ltd, a firmed owned by the directors, compelled to pay Sh50 million and interest at commercial rates.

In its suit papers, NCBA says it had advanced Shiva Carriers Ltd various loans in March 2009, September 2012, August 2014, April 2015 and November 2017.

As directors and shareholders of Shiva, Mr Madan and Mr Deepak acted as guarantors of the loans, giving three separate guarantees on diverse dates.

“In addition to the guarantee and undertakings, Jagged Alliance Ltd as a related company to Shiva Carriers Ltd gave a guarantee and undertaking of Sh263 million,” NCBA says in the court papers.

NCBA says Springbank also offered its parcel of land as security in 2011 and 2015.

The bank says that when Shiva Carriers defaulted on the loan it was forced to repossess trucks and trailers it financed.

But the company filed a case at the High Court in Mombasa in 2017 to block it. The firm then withdrew the petition through a notice dated October 3, 2019.

“Since withdrawal of the suit, Shiva Carriers Ltd has continued to default in repaying the banking facilities as contracted or at all,” says the bank.

NCBA says the loan it was owed by Shiva stood at Sh245.5 million as at January 27 and continues to balloon on interest at commercial rates.

The lender said it attempted to sell the land used as security for the defaulted loan but has been unsuccessful.

“The sale of the parcel of land has, however, not been successful because potential buyers have been advised that the property is partially on a road reserve,” the bank said.

Further, NCBA says an investigator it had hired to establish the whereabouts of the firm’s trucks and trailers could not trace them.