Absa Bank #ticker:ABSA has renewed a battle for the repossession of 98 vehicles it financed in 2017 to bankrupt Italian firm CMC Di Ravenna for construction of controversial Itare dam.
High Court judge Francis Tuiyott Wednesday directed Rift Valley Water Works Development Agency to release the vehicles and equipment by Monday after Absa lawyer Kamau Karori said the agency was still holding the vehicles, despite being served with court orders.
Mr Karori said the refusal to release the motor vehicles and equipment financed by the lender amounts to willful failure and disobedience of court orders.
In March, the High Court issued orders directing the state agency to deliver the motor vehicles financed under the deal, to a yard in Nakuru.
But the agency filed another case in Nakuru arguing that the assets and materials used in the construction of Itare Dam in Nakuru were its properties.
The agency said it spent Sh82.5 million for equipment mobilisation. And after the termination of the contract, the agency had the right to seize the equipment and materials used in the site, pending the conclusion of the case.
Absa later joined the case in Nakuru and Justice Joel Ngugi discharged orders obtained by the agency on July 13, and ordered the matter to be transferred to Nairobi for hearing before Justice Tuiyott.
Documents filed in court showed that Absa and the Italian firm entered into a deal for asset refinancing in June 2017 where CMC transferred an equal joint ownership interest in the motor vehicles and equipment to the bank.
CMC later defaulted in servicing the loan and Absa commenced the process of repossessing the vehicles in a bid to recover Sh585 million loans advanced to the contractor.
The bank said it loaned CMC Di Ravenna Sh585 million for the purchase of 98 vehicles and equipment to be used in the project.
The Directorate of Criminal Investigations (DCI) later joined the case seeking to seize 17 vehicles, which were financed through public funds. The DCI said in documents that Sh160 million of the dams’ project money was paid to Toyota Kenya for 45 vehicles ranging from Prados, Fortuners, Corollas, Hiace vans and pick-up trucks. But only 17 of the vehicles were registered to CMC Di Ravenna.
CMC Di Ravenna has since filed for insolvency in Italy and urged Justice Tuiyott to adopt the proceedings, but the Judge rejected the application in November because it was not properly filed.