Modern Truckers Ltd and its managing director Haroon Shahid Butt also want an order issued compelling the bank to discharge the land it is holding and release its title to Mr Butt.
According to the plaintiffs, on March 2018, the bank irregularly registered a charge over the land located within the upmarket Nyali Estate to secure a financial facility of Sh130 million.
The company and its MD argue that the bank has declined to advance any money despite holding the property as security.
A long distance truck company has sued the Kenya Commercial Bank #ticker:KCB seeking Sh519.3 million as compensation for lost revenue over alleged holding of its prime parcel of land as security for a loan which was never disbursed.
Modern Truckers Ltd and its managing director Haroon Shahid Butt also want an order issued compelling the bank to discharge the land it is holding and release its title to Mr Butt.
According to the plaintiffs, on March 2018, the bank irregularly registered a charge over the land located within the upmarket Nyali Estate to secure a financial facility of Sh130 million.
The company and its MD argue that the bank has declined to advance any money despite holding the property as security.
“The plaintiffs long distance truck business has been fundamentally affected by Covid-19 pandemic and the containment measures placed by the government to help control the spread of the virus,” part of the suit documents state.
The plaintiffs say KCB had through deliberate misrepresentation procured a charge over the property to secure an imaginary financial facility which has never been disbursed to them.
Modern Truckers Ltd and Mr Butt further claim that KCB has deliberately been holding onto and enjoying the use of the land as part of securities within its control and disposal while being aware they have no loan or any liability with it.
They also accuse KCB of falsely representing to them that it was in a position to take over their facilities with the collapsed Imperial Bank Kenya Ltd (IBKL) and secure the release of Sh120 million held in fixed deposit, when it was aware that it was not able.
The plaintiffs accuse the bank of unfairly applying its market standing as a first tier bank to falsely and fraudulently induce them (plaintiffs) into granting it a charge without any valuable consideration.
According to the plaintiffs, sometimes in 2017, KCB approached them with a proposal to provide financial services and take over the loans they (plaintiffs) had with IBKL.
“The defendant was fully aware that the plaintiffs were banking with the collapsed IBKL and at the time of its collapse, they had over Sh120 million in fixed deposits,” argue the plaintiffs.
According to the plaintiffs, the money with other properties were used by IBKL as securities for short term business loans advanced to them by the collapsed bank.
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