Powerful Moi-era politician and one-time Co-operative Bank #ticker:COOP chairman Hosea Kiplagat risks losing his expansive Karen residential home and associated company assets over a Sh378.61 million loan.
Bank of India is seeking to recover the millions of shillings that Mr Kiplagat guaranteed two firms — Eldoret Concrete Poles Limited and Timber Treatment Limited — through a public auction between August 25 and August 28.
Garam Investments — which is leading the auction—has invited bids despite Mr Kiplagat getting a court order temporarily freezing the sale of the properties.
The auction targets Mr Kiplagat’s Karen home that sits on five acres and 11 other pieces of land belonging to the two companies.
The two companies obtained the loan on May 14, 2018 but have failed to repay the money, prompting Bank of India to auction the securities.
In a public notice, Garam Investments said it would auction the five-acre parcel of land in Nairobi’s Karen area located along Quarry Lane off Bogani Road where an acre of vacant land costs Sh55 million on average.
Mr Kiplagat, who served as the Co-op Bank chairman for a decade before resigning in 2003, has, however, got a temporary reprieve after the defaulting companies obtained court injunction.
Eldoret Concrete Poles and Timber Treatment say that they borrowed the money to boost their working capital and purchase of tractors and machinery.
They say in separate court papers that they wrote to Bank of India on March 27, requesting for a three-month grace period after running into Covid-19 headwinds but the lender did not respond.
Through their lawyers, the companies say they have engaged a new financier to take over the loan and therefore the auctions should be stopped.
“The intended sale of the suit premises by public auction is wrongful and if the defendant (Bank of India) is not restrained by an order for injunction, the rights of the plaintiff as chargors will be grossly violated,” say the lawyers.
The two firms are now counting on the new financier to take over the loan or they face the auctioneer’s hammer.
Mr Kiplagat stands to lose his expansive home which auctioneers say is double-storey with several multi-purpose rooms.
“It is developed with a three-bedroom (master ensuite) main house complex, son’s two-bedroom guesthouse (one suite), a three bedroom servants’ quarter, a garage and carwash bay,” Garam says in the auction notice.
“It has a double-storeyed business room and guest entertainment block, a swimming pool (with fountain) and a baby pool, sauna and steam bath complex (with Jacuzzi), Office block complex, squash complex, three green houses and two beehives.”
Timber Treatment, where Mr Kiplagat served as chairman, risks losing 11 parcels of land designated as industrial-cum-residential properties located within Kenmosa area in Eldoret.