Tujus face bankruptcy charge over Sh1.6 billion bank loan

Jubilee party secretary-general Raphael Tuju
Jubilee party secretary-general Raphael Tuju. FILE PHOTO | NMG 

The East African Development Bank (EADB) wants a petition filed by Jubilee party secretary-general Raphael Tuju and his children seeking to stop bankruptcy proceedings against them dismissed.

The lender reckons that the Cabinet Secretary and his children — Mano Tuju, Alma Tuju and Yma Tuju — have no grounds to oppose a demand to pay Sh1.6 billion as guarantors to the family business, Dari Ltd, which has defaulted on the multimillion shilling loan.

The bank has informed the court of its plans to file a bankruptcy suit against the Tujus, which will collapse if the court quashes the demand notice.

The Tujus say EADB must first pursue Dari for the debt, and not the guarantors, adding that the lender is also holding security whose value can clear the debt. But EADB said the guarantee is not disputed and the liability from the defaulted loan had already crystalised.

“Accordingly, the court should dismiss the present application and proceed to the bankruptcy application to allow the applicant an opportunity to show the value of the security exceeds the demand,” says EADB in its submissions.


If the bankruptcy suit is successful, the Tujus will be barred from elective politics because the law does does not allow a bankrupt person to hold public office.


It also means any property belonging to the Tujus can be repossessed by the credit manager for liquidation to settle the outstanding debts.

The decision would also restrict the Tujus to only handling cash they need for subsistence, accommodation and transport.

The Tujus said the demand notice was incompetent and did not disclose the fact that EADB holds security against the Sh1.6 billion loan.

They further disclosed that a valuation conducted on the property in 2015 indicated it had a combined market value of Sh1.84 billion, which is in excess of the amount being demanded.

“The failure on the part of the creditor to comply with the law and to acknowledge the full extent of the securities held is selective disinformation and is wilfully designed to mislead the court and ultimately to rob the debtor of their constitutional right to property,” said Mano.

The bank has the Kenya’s court backing to enforce a UK judgment to seize Mr Tuju’s property under Dari for sale over the loan default.

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 the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

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

Mr Tuju and his children guaranteed the multi-million shilling loan, allowing EADB to suck them into the suit where it is seeking to take over the 20-acre prime property in Karen and the high-end hotel operated by the Tujus.

The Tujus have blamed EADB for the delayed construction of the Karen homes after the lender declined to provide additional millions for building the luxury houses in breach of the loan agreement.


Mr Tuju accused EADB of disbursing Sh932.7 million 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.

The London court dismissed Dari’s opposition to the bank’s claim, setting the stage for the lender to seek enforcement and auction.