Economy

Tuju faces court action in Sh1.6bn debt row

tuju

Jubilee Secretary-General Raphael Tuju. FILE PHOTO | NMG

Summary

  • High Court judge Mary Kasango directed Mr Tuju and his children Yma, Mano and Alma to appear before her on September 21 to explain why they should not be jailed for obstructing two receiver managers from taking over the operations of Dari Limited.
  • The company owns high-end Dari Restaurant in Nairobi’s Karen area and a 20-acre recreational resort dubbed Entim Sidai.
  • The four were guarantors of Dari Ltd when the company borrowed a loan from the East African Development Bank (EADB) in 2015.

Jubilee Secretary-General Raphael Tuju and his three children face court sanction after they blocked a bank from taking control of a family property over a Sh1.6 billion debt.

High Court judge Mary Kasango directed Mr Tuju and his children Yma, Mano and Alma to appear before her on September 21 to explain why they should not be jailed for obstructing two receiver managers from taking over the operations of Dari Limited.

The company owns high-end Dari Restaurant in Nairobi’s Karen area and a 20-acre recreational resort dubbed Entim Sidai.

The four were guarantors of Dari Ltd when the company borrowed a loan from the East African Development Bank (EADB) in 2015.

Dari Ltd was placed under receivership in January over the Sh1.6 billion debt owed to EADB, although Mr Tuju has appealed the decision.

Two weeks ago, Mr Tuju deposited Sh50 million as directed by the appellate court, as a condition from stopping the bank from auctioning his property.

Thursday, Justice Kasango reiterated that the receiver managers, Muniu Thoithi and George Weru, should access to the premises in Karen and start running the company.

The bank through Senior Counsel Fred Ojiambo argued that the directors of Dari Ltd had disobeyed court orders and that they should therefore be punished for contempt.

Mr Tuju, through Senior Counsel Paul Muite, said he and co-directors have argued that they were denied the right to be heard ahead of court issuing the receivership orders.

In the ruling on March 25, the court directed the Tujus to hand to the receivers the company’s statement of affairs, financial returns and records as well as cash book from December 29, 2019.

They are also required to hand in management accounts, list of debtors and creditors as at February 4, 2020 and the staff payroll.

But their attempts to access the premises were repulsed by police officers manning the premises.

EADB is demanding Sh1.6 billion from Tuju following a botched loan deal that saw the regional lender offer Dari $9.3 million (Sh943.9million)

The loans were meant for the construction of Sh100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

But the development of the 12 luxury homes worth Sh1.2 billion fell behind schedule, setting the stage for defaults and asset seizures.

Mr Tuju, through his lawyer Paul Nyamodi, blamed the bank for the delayed construction of the homes after the lender declined to provide additional money for building the luxury houses in breach of the loan agreement.

Mr Tuju accused EADB of disbursing Sh932.7million instead of the agreed Sh943.9 million, adding that the bank had reneged on the plan to offer Sh294 million for building the luxury homes for sale.

He also accuses EADB of stopping KCB Group from taking over the loan and derailing equity investments in the deal by Dubai investors.

The dispute was heard by a UK court, which ruled in favour of the bank. The judgment was later adopted by High Court judge Wilfrida Okwany but Mr Tuju moved to the Court of Appeal.