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Economy

Tycoon Langat-linked firms sue bank over Sh500m land

Businessman David Langat
Businessman David Langat. FILE PHOTO | NMG 

Two companies linked to billionaire businessman David Langat, have filed a petition seeking to block Transnational Bank from attaching a parcel of land they used as security for a disputed Sh134 million loan.

Koima Developers Ltd and Koisagat Tea Estate Ltd also want the bank restrained from issuing or advancing adverse notices to any licensed credit reference bureau (CRB) in regard to the contested debt and arrears purported to have accrued from it.

The two firms claim that Transnational Bank unfairly targets the land worth more than Sh500 million yet they only owed the lender Sh46 million and not Sh134 million as alleged by the bank.

In a suit filed at the High Court in Mombasa, the companies say that they remain committed to clearing the loan secured in 2015 to finance their working capital requirements as demonstrated by the repayment of Sh20.9 million between February and March alone.

This, they argue, pushed their overall repayment to more than two-thirds of the entire loan despite economic challenges due to the Covid-19 pandemic.

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“Due to its financial constraints, the companies have on several occasions attempted to negotiate restructuring of the loan to complete repayment. However, the bank denied the request,” argue the companies in their suit documents.

The two firms claimed that the bank denied their request to have the loan restructured contrary to Central Bank of Kenya’s (CBK) directives on mitigation of adverse effects on borrowers from the Covid-19 pandemic.

The companies say that on or about August, they learnt of an alleged notice in respect of a charge over the land as a guarantor in favour of DL Koisagat Ltd as borrower.

The notice, they claim, was not served on them.

According to the notice, a sale was to take place 40 days from the service to recover the disputed amount of money inclusive of interest and penalties.

“The plaintiffs have at all material times been and remain willing to offset and settle the rightful amounts that are due to the defendant in lieu of the arrears for the facility granted,” they say in court documents.

The companies said that since they had already re-paid more than two thirds of the entire loan, the lender should be compelled to seek permission from the court to attach or sell off the land parcel or any of their properties.

The plaintiffs further claim that the bank had threatened to forward the claimed debt to a CRB, plans they termed malicious and would tarnish their names and prevent them from obtaining credit facilities for seven years.

Mr Langat has often kept off the public limelight.

But media reports in the past cast him as a key campaign financier to many of current and former Rift Valley politicians.

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