PCEA battles bank attempt to auction 202-acre Ruiru land

PCEA has in an application asked the High Court to stop the auction that was slated for Wednesday, arguing that the bank has gone back on a deal that was to see the church repay the loan with funds raised from selling sub-divided plots of the land.

“NBK has reneged on the terms of the deal and has threatened to sell the property. All proceeds from the sale of subplots have been paid to NBK. The subdivision exercise and sale of the plots has not been completed and in the circumstances PCEA has not defaulted on its obligations to NBK,” said the church.

The church subdivided the land and has been selling a quarter acre at Sh1.8 million, half an acre at Sh3.5 million and an acre at Sh6.9 million.

It now wants the planned auction by NBK stopped, arguing that it has honoured its deal with the bank by remitting all the proceeds it has got from the sale of several plots of land so far.

PCEA further claims that the subdivision and sale of the land has not been completed hence it cannot be found to be in default of its agreement with the bank.

Five buyers of the plots were on November 24 granted orders by Justice Francis Gikonyo stopping sale by the bank of the land they have already purchased.

Lucy Ngigi, Mary Mugure, Mary Ng’ang’a, Simon Kamau and Joseph Kihara were granted reprieve after they filed a suit seeking to stop the sale of their plots.

The hearing of their petition is slated for January 20.

READ: PCEA fights auction of Sh1.4bn land

NBK has however said in its response that the church has constantly defaulted on repaying of the loan, which forced it into auctioning the land.

Raphael Orimba, NBK’s remedial manager, says in suit papers that the bank last year agreed to restructure the loan repayment agreement, but the church has continued to default.

“The bank in good faith agreed to restructure the outstanding loan facility of Sh513.7 million to be made payable in 48 monthly instalments of Sh14.8 million,” said Mr Orimba.

The bank further says that an audit on the church’s collection account with Equity Bank revealed that it had Sh536 million, which was more than enough to settle the outstanding loan amount.

The church had earlier told the bank that it expected to collect Sh915 million from the 286 unsold plots of land and a further Sh123 million from balance owed it by buyers of the already sold plots.

Justices Fred Ochieng’ and Jacqueline Kamau have both declined to issue orders stopping the auction after handling the case on two different occasions.

The church says it is ready to remit the outstanding interest amount of Sh152 million in installments of Sh51 million with the first tranche to be paid within 21 days of agreement.