Lender says it stands to make losses if the deal by multibillion-shilling real estate owner stands
The bank argues that all the properties are registered in its favour as security for a Sh1.1 billion mortgage loan
Sucasa and Encasa West Limited, the two companies at the centre of the liquidation suit, are owned by the Murayas
The Co-operative Bank #ticker:COOP is seeking to scuttle a deal signed between real estate developers Peter and Susan Muraya and a contractor who is in court seeking to wind up their real estate company, Sucasa.
Co-operative Bank has filed an application to set aside the deal that would have seen the contractor get residential apartments, bedsitters and houses as settlement for outstanding debts.
The bank argues that all the properties are registered in its favour as security for a Sh1.1 billion mortgage loan borrowed by Suraya (Susan and Muraya) Property Group.
Eternal Foundation Construction had filed the case in February seeking to wind up Sucasa and Encasa West, which are associated with the Suraya Property Group, over more than Sh53 million debt.
“The interested party is aggrieved by the said consent order because it holds all assets and debenture dated September 2013 over all the moveable assets of the company and more particularly, over the project called Sucasa at Mombasa Road,” says Co-operative Bank in its court filing.
The bank, in papers filed June 20 on its behalf by MMC Africa Law, claims that the agreement purports to bind it to discharge the apartments for it to be registered in favour of Eternal Foundation Construction, without prior notifications.
As per the consent dated April 27, Sucasa had agreed to surrender 21 studio apartments, 17 one-bedroom apartments and three bed sitters to Eternal Foundation Construction to settle the winding up suit.
Sucasa and Encasa West Limited, the two companies at the centre of the liquidation suit, are owned by the Murayas, whose vast real estate empire is valued at billions of shillings.
Eternal Foundation Construction claims that Sucasa is unable to pay the Sh53 million that was due to it at the beginning of October 2017.
The firm said it had partially completed construction of 1,087 units on plot L.R NO 202882 in Mlolongo-Mavoko.
But Co-op Bank is asking the court to set aside the consent, which has been recorded in court and also dismiss the suit, accusing the contractor of using the case as a debt collection tool.
Co-op further wants the court to restrain the contractor from advertising the winding up suit in the newspapers, noting that it will derail the confidence of the buyers in the project.
Heavy losses
The bank says the project should be allowed to complete arguing that it’s viable and that itself and other creditors will incur heavy loses if it is wound up or construction interrupted.
The bank further pokes holes into Sucasa’s claims noting that the total number of units once completed is 1,062 units, which it says are less than 1,087 units the contractor claims to have partially completed.
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