A court has stopped a bank from auctioning a former MP’s home over a Sh364 million disputed loan.
Former Regional Minister and The Wajir East MP Mohammed Abdi got a reprieve when High Court Judge Justice Luka Kimaru yesterday ruled the notice given by NIC bank to sell the home at Nairobi’s Spring Valley was illegal.
He said Abdi only acted as a guarantor for another company, Al Jalal Enterprises Ltd, for Sh40 million. The money was for the completion of a shopping mall, the judge said, and it was unjust for the bank to demand what was not guaranteed in the agreement.
The former MP, through his company, Sunrise Properties, moved to court to stop the bank from selling his home. The loan was given to Al Jalal Enterprises, a sister company of Sunrise Properties.
Justice Kimaru said although the two companies had common directors, the bank could not "nail down" the guarantor. Sunrise, through its lawyer, Mr Gichuki King’ara, maintained that it only acted as a guarantor . "The bank cannot ask my client to pay Sh364 million because it was not guaranteed," King’ara told the court.
He said the demand for the money was illegal because the bank failed to realise the property of the principal borrower to recover the disputed loan. "Instead, they over reach to the guarantor and now want to sell a family house in Spring Valley," he said.
The money was allegedly borrowed in November, 2005.
