Tuju plea set to delay Sh1.6 billion loan case

Jubilee Party Secretary-General Raphael Tuju is seeking the removal of a judge from a court case after she directed that East African Development Bank (EADB) take over his hotel and property firms at the centre of a Sh1.6 billion defaulted loan.

Appearing before Justice Grace Nzioka on Friday, Mr Tuju through his lawyers, Paul Muite and Paul Nyamodi, alleged that the judge had displayed open bias towards the bank to the detriment of Dari Ltd.

However, EADB, through Senior Counsel Fred Ojiambo, said the latest application by Mr Tuju was a ploy to delay contempt proceedings against him over the loan dispute.

The contempt charge, which comes with a jail term or a fine, is hinged on the refusal by Mr Tuju and his children to allow EADB-appointed receivers to access the properties or share information on the company such as staff payroll, books of accounts and list of debtors. His children acted as guarantors for his Sh1.6 billion loan.

Mr Tuju has contested the court orders, arguing that the directives were issued before the judge heard his side of the story. He wants the orders reviewed and for Justice Nzioka to stop hearing the matter.

"That Lady Justice Grace Nzioka has openly demonstrated bias when recording the court proceedings by excluding submissions by the parties, especially the plaintiffs," Mr Tuju said in his affidavit.

He claimed that Justice Nzioka gave EADB lawyers ample time during sessions and does not record court proceedings, making it difficult for Mr Tuju to appeal her decisions.

The court had on March 25 ordered the directors of Dari Ltd, to give two receiver managers, Muniu Thoithi and George Weru, access to Mr Tuju's Karen property.

The receiver managers who were appointed by EADB to manage the property said in court documents that they had been blocked thrice from entering the premises in defiance of the judge’s order.

This followed an earlier order to place the Tuju firms under the watch of the receiver managers on failure to pay the Sh1.6 billion loan that was borrowed in 2015, when Mr Tuju was out of the political arena, and on which he defaulted in 2017.

The court had opened the way for Mr Tuju and his three children to be fined or committed to civil jail for up to six months in the event they failed to grant access to the receiver managers. The judge directed the case to be heard on May 20 if Mr Tuju breaches the court orders.

“That I am advised that it is clear that the plaintiffs have no intention of obeying court orders given their persistent and flagrant disobedience of court orders. It is critical that this honourable court upholds the sanctity of court orders,” Mr Weru said in court papers.

He told the court that he had reported the breach of court orders to Karen Police Station, arguing that the station commander informed the receivers that police officers had been assigned to guard the restaurant against terror threats and that they were under the direction of the directors.

Mr Tuju had argued that the bank’s intention was meant to frustrate his plan of repaying the debt and ultimately auction his property.

The loans were meant for the construction of 12 two-storey bungalows, each worth Sh100 million. The estate was to sit on a 20-acre forested land named Entim Sidai. Part of the loan was also meant for the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

However, development of the 12 luxury homes worth Sh1.2 billion has fallen behind schedule, setting the stage for the default and asset seizures.

Mr Tuju and his children had guaranteed the multimillion-shilling loan, allowing EADB to rope in the children into the suit where it is seeking to take over the 20-acre property in Karen as well as the high-end restaurant.