Banks mum on KR land Sh45 billion borrowing

Commercial banks that advanced loans to private individuals and companies using Kenya Railways Corporation (KR) properties as collateral have refused to disclose the status of the debts, Parliament heard on Tuesday.

The Public Investments Committee (PIC) heard that the lenders have invoked confidentiality clauses to withhold information on the status of the loans that run into billions of shillings.

The committee had ordered KR to provide status report on 25 different loans that 10 private firms and individuals borrowed using KR land as collateral.

The committee wanted KR to table consent it granted the private entities that borrowed to the tune of Sh45 billion using its land.

PIC had issued the directions to KR after the corporation disclosed that all the 10 firms which secured the money ranging from as low as Sh8 million to Sh4.1 billion are based in Mombasa.

“We as KRC could not get details of what our clients have obtained from banks. The lenders have told us that the documents on loans relating to our leased properties and which have been charged are confidential. The banks told us that they cannot reveal the loan details since they are confidential documents,” Philip Mainga, the acting KRC managing director, told the committee chaired by Mvita MP Abdulswamad Nassir.

Mr Nassir said PIC has written to all the banks that loaned the private individuals using the corporation land to provide the status of the loans.

“We required that you provide us with the consents that allowed them to take the loans using your land. There were about 25 pieces of property. We want you to table all the consents,” Mr Nassir told Mr Mainga.

He promised to provide the leases and the consents within a week.