EADB says doubtful Raphael Tuju will repay Sh1.5bn loan

The East African Development Bank (EADB) has now moved to the High Court to enforce a decision issued by a UK judge for the lender to recover Sh1.5 billion from Jubilee Party secretary-general Raphael Tuju.

Appearing before Justice Wilfrida Okwany on Monday, the bank through lawyer Prof Githu Muigai said they were apprehensive of failing to recover the money, especially after learning that Mr Tuju and his company Dari Ltd were in the process of subdividing and constructing houses on two parcels of land, which was used as security to secure the loan.

In an affidavit filed by Mr Ronald Makokha, the regional lender said Mr Tuju could be developing the 20-acre parcel in Karen with a view to dispossessing the property, yet the titles have been charges to the lender.

“The applicant is therefore apprehensive that the respondent’s actions are intended to frustrate the chances of recovery by the applicant upon the registration and enforcement of the judgement,” Mr Makokha said in an affidavit.

Prof Muigai told Justice Okwany that the Cabinet Secretary and his company lost the suit in the UK court and in his view, they have satisfied the requirement for the judgement issued by deputy judge of the High Court Mr Daniel Toledano, QC on June 19, 2019.

In the matter, the bank accused Dari Ltd of defaulting in repayment of a loan of $9.3 million granted to the company in 2015, thereby breaching the obligation under the said agreement.

Court documents showed that the restaurant had entered into an agreement with the bank on April 10, 2015, under which it agreed to give Dari a $9.3 million (Sh943.9 million) loan.

The bank said it issued a demand for the immediate repayment of the loan, after getting the judgement in UK but the company has failed to honour the same.

Mr Tuju accused EADB of disbursing Sh932.7million 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.

“EADB is fully aware that in the absence of the development of the housing units for sale as envisaged in the project proposal, Dari would not be able to service the loan facility,” he added.

He also accuses EADB of stopping KCB Group #ticker:KCB from taking over the loan and derailing equity investments in the deal by Dubai investors.

“The defendant is frustrating the plaintiff’s efforts to secure alternative funding thereby clogging the plaintiffs right to redeem the facility,” he added.