Bank of India has been allowed to sell some property belonging to former Co-operative Bank chairman Hosea Kiplagat to recover a loan of Sh375 million advanced to his firm three years ago.
The former Kanu operative failed to stop the auctioneers from selling the parcels of land in Eldoret town after a judge ruled that he did not demonstrate how the lender violated his rights by seeking to sell the property to recover the debt.
Documents filed in court show that Mr Kiplagat, through his company Timber Treatment International, took a loan of Sh275 million from the bank in 2017 and charged 12 properties in Eldoret town.
Bank of India has been allowed to sell some property belonging to former Co-operative Bank chairman Hosea Kiplagat to recover a loan of Sh375 million advanced to his firm three years ago.
The former Kanu operative failed to stop the auctioneers from selling the parcels of land in Eldoret town after a judge ruled that he did not demonstrate how the lender violated his rights by seeking to sell the property to recover the debt.
Documents filed in court show that Mr Kiplagat, through his company Timber Treatment International, took a loan of Sh275 million from the bank in 2017 and charged 12 properties in Eldoret town.
He later took another loan of Sh100 million in June 2018 to buy a tractor, importing plant and machinery and financing capital requirements. He charged the same properties. Mr Kiplagat is the chairman of Timber Treatment International.
Justice David Majanja said in as much as the company had pleaded that it had been unable to repay the debt due to the harsh business environment and the Covid-19 pandemic, it failed to show how it would repay the debt.
“In any case, the court cannot compel the bank to accept the company’s proposals to restructure the facilities by restraining it from exercising its legal remedies as this would amount to re-writing the parties’ bargain,” the judge said.
According to Mr Kiplagat, his company defaulted due to hostile and unpredictable business environment coupled with Covid-19 pandemic.
He admitted defaulting on the loan, but pointed out that the amount continued to accrue interest at the rate of four percent above the Central Bank Rate per annum. As at September 2019, the amount stood at Sh185.3 million, he said.
He said the sale, which was planned for March last year, would deny the company its right to redeem the properties.
The bank, through its Eldoret branch senior manager Rohit Yadav, said the company had never approached it with plans of repaying the loan and only responded through its advocates when the bank issued notices.
The lender said Mr Kiplagat held a meeting with its chief executive, Sharda Bhushan Rai, last year seeking a grace period for 90 days to settle the arrears. The bank said it rejected the request on the ground that it had given the company several opportunities from September 2019 to remedy the default through four notices but it failed to respond to them.
It was further revealed that after discussions, Mr Kiplagat promised that the company would deposit Sh50 million within a week in order to regularise the account and the auction was halted. The court heard the company failed to comply and instead filed the case.
Justice Majanja said despite being given a chance, the company failed to settle the arrears or redeem the properties when it was served with a notice.
“The company did not contest the validity of these notices nor dispute the fact that it received them. It also admits that it received the auctioneer’s notice which, in fact, precipitated this suit,” the judge said while dismissing the case.
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