Economy

KCB supports Ruto in Weston Hotel demolition row

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Weston Hotel. FILE PHOTO | NMG

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Summary

  • The bank Thursday told Justice Benard Eboso that the Kenya Civil Aviation Authority (KCAA) erred in filing a fresh suit for repossession of the land instead of challenging a 2019 decision of the National Land Commission (NLC).
  • The NLC had directed that Weston Hotel keeps ownership of the land and pays off KCAA for the property at the current market value.
  • But KCAA is pushing for revocation of the title issued in the 1990s, which ultimately will lead to the demolition of the hotel, drawing protests from the Deputy President.

KCB Group #ticker:KCB has backed the court battle to block repossession of land on which Weston Hotel sits, fearing loss of security to the Sh1.2 billion loan it advanced the business associated with Deputy President William Ruto five years ago.

The bank Thursday told Justice Benard Eboso that the Kenya Civil Aviation Authority (KCAA) erred in filing a fresh suit for repossession of the land instead of challenging a 2019 decision of the National Land Commission (NLC).

The NLC had directed that Weston Hotel keeps ownership of the land and pays off KCAA for the property at the current market value.

But KCAA is pushing for revocation of the title issued in the 1990s, which ultimately will lead to the demolition of the hotel, drawing protests from the Deputy President.

KCB, which offered Weston Sh1.2 billion five years ago, has asked justice Eboso to dismiss KCAA and offered support to the hotel.

“We now tender these submissions to support the 2nd respondent (Weston Hotel) application,” said KCB in a court affidavit.

KCB says the law provides a procedure for an appeal before the Environment and Land Court, adding that KCAA should have appealed against the land commission within 14 days instead of filing a fresh suit.

“The petitioner had the option of appealing the determination of NLC within the prescribed period if it was aggrieved. It did not. In bad faith and without regard to due process, it filed the instant petition in a guise that its constitutional rights had been violated,” the bank said.

“We humbly ask your lordship not to sanction such an abuse of court process.”

KCAA wants the decision by NLC directing the management of the hotel to compensate the agency for the land quashed.

Weston has maintained that it was an innocent purchaser and that the case was filed with ulterior motives, especially after NLC made a finding that the title was acquired legally.

Last year, the court stopped the implementation of NLC’s decision.

The disputed public land had been acquired by the defunct Directorate of Civil Aviation in the early 1990s for the construction of its headquarters.

The agency stated that Weston embarked on rapid construction without obtaining mandatory development approvals from relevant State regulatory agencies.

KCB waded into the dispute, arguing that it did due diligence and confirmed that Weston was the registered proprietor of the land before advancing more than Sh1.2 billion to the hotel five years ago.

Cancelling the title as pleaded by KCAA, said the lender, would prejudice it as it would end up losing monies, which the hotel was still repaying.

The lender said the first loan of Sh350 million and $1,500,000 (Sh167.4 million) was advanced to the hotel in October 2014 and charge registered.

The bank said about a year later, in July 2015, the hotel took a further loan of Sh700 million and charged the property.

“At the time of registration, the interested party (KCB) did a due diligence and fulfilled all prerequisites to registration of the charge in land as required by law,” the bank said in documents filed in court.

KCB is fretful that an order declaring the title illegal would prejudice it, arguing it would lose the only security it attached to the loan.

Dr Ruto has linked the court bid to demolish Weston to the politics around the 2022 presidential election where he is fighting to replace President Uhuru Kenyatta.

The hotel has filed fresh court papers arguing that the suit is a conspiracy between the KCAA and certain actors to politicise the controversial land deal for cheap political drama.

“It is a cheap attempt on the part of the conspirators to malign and scandalise the Deputy President because it is believed he has certain interest and association with the property,” said Weston lawyer Ahmednasir Abdullahi in his submission.

“The suit is being prosecuted to damage him politically. It is precisely because of that political scheme that the petitioner (KCAA) had been forced to file this petition instead of filling an appeal from the decision of the 1st respondent (NLC).”

Justice Eboso will rule on March 3 next year whether the court has jurisdiction to determine the case.