Kimilili MP fights off bankruptcy over Sh4.2m vehicle debt

Didmus Barasa
Kimilili MP Didmus Barasa. FILE PHOTO | NMG 

Kimilili Member of Parliament Didmus Wekesa Barasa is facing a bankruptcy suit after failing to pay Sh4.2 million debt owed to a car dealer.

Smart Cars Limited and Car City Limited claims that Mr Barasa has failed to pay the outstanding balance for a personal Toyota Land Cruiser vehicle that he purchased in 2017 and now wants him to be declared bankrupt.

Documents filed in court show that the car dealer had earlier filed a suit at the Magistrate’s court last year seeking to compel Mr Barasa to settle the debt but in October they entered consent with the MP undertaking to pay in eight monthly installments.

But the firm now claims that Mr Barasa has failed to settle the debt, prompting it to file the insolvency petition.

“The said Hon Didmus Wekesa Barasa is unable or has no reasonable prospect of paying the debt and a bankruptcy order is merited as prayed herein,” says the car dealer in documents filed in court on January 24.


Losing seat

The MP risks losing his parliamentary seat since a person declared bankrupt is not allowed to hold a public office is not allowed to hold a public office as per Kenyan law.

The firm says it has already paid the mandatory fee of Sh50,000 towards the official receiver’s expenses.

It argues that they have no remedy other than seeking orders to place the estate of the MP under receivership since no security has been charged by Mr Barasa.

The court documents show that Mr Barasa entered into agreement with the car dealer on September 25, 2017 for the purchase of the Toyota Land Cruiser at a cost of Sh11.7 million.

Mr Barasa deposited Sh1 million, Sh7 million was to be paid by Parliament and he undertook to settle the outstanding Sh3.7 million by October 11, 2017.

As per the consent with the car dealer, Mr Barasa agreed to settle the Sh3.7 million balance and Sh500,000 costs incurred prosecuting the case.

He agreed to pay Sh500,000 within seven days of filing of the consent, and the rest in eight monthly installments of Sh462,500 payable by the fifth of every month.

The consent, which was adopted as an order of the court, indicates that the entire amount would become immediately due in the event of default.

The firm wrote to Mr Barasa in December demanding payment of the entire outstanding amount, noting that he had defaulted on payments.

Settlement deal

But Mr Barasa through his lawyer responded, indicating that the settlement deal brokered by Hon Eugene Wamalwa was impractical to him, noting that he intended to renegotiate the installments.

“As you are aware, the practical position is that the previous engagements with yourselves was at the behest of Hon Eugene Wamalwa and your clients are too well aware of the position. Even the installment terms were entered into at the behest of promises and guarantee underpinned by Hon Eugene Wamalwa,” the lawyer wrote.

The car dealer rejected this claim, arguing that it was not aware of any third party involvement in the deal.

Mr Barasa is yet to file his response.

The High Court on February 28, 2019 allowed the firm to advertise the suit in a newspaper and the Kenya Gazette and directed the case to be heard on March 26.