Former cabinet secretary Raphael Tujuย has lost his Dari Restaurant in Karen Nairobi, following an auction of the property on October 1.[โฆ]CLICK HERE TO READ THE FULL ARTICLEโถ
A mystery buyerโs Sh450 million bid was enough to take away the prime property from Mr Tuju over a defaulted loan from the East African Development Bank (EADB).
The auction followed a protracted legal battle instigated by Mr Tuju in 2021 which went in EADBโs favour after the High Court allowed the lender to recover the defaulted debt.
Garam Auctioneers chief executive officer Joseph Gikonyo confirmed that the restaurant was sold and that a deposit of Sh45 million has already been paid.
โWe successfully auctioned (the restaurant) on October 1 for Sh450 million. The purchaser paid the required 10 percent of the price, and are liberty to complete the balance within 90 days,โ he told theBusiness Daily.
There were four bidders in the October 1 auction.
In 2021, Mr Tuju had told the court that the property was worth Sh3.5billion. In the purchase of property like land, it is standard practice for the buyer to pay a 10 percent deposit and clear the balance within 90 days as the seller also completes the ownership transfer.
Mr Gikonyo added that his firm plans to auction a second property, Entim Sidai, later this month which was also subject to the defaulted loan and the court proceedings.
Mr Tuju moved to court arguing that he has never been served with a statutory notice under section 90 of the Land Act.
He said the lender is seeking to recover $35,051,622 (about Sh4.5 billion), an amount that has exceeded the principal amount, on account of interest.
Mr Tuju said the auctioneer issued the notifications advertising for the sale of the property, unlawfully and that there were several cases pending determination in various courts. The bank had opposed the case stating that Mr Tuju had admitted the debt and had unsuccessfully pleaded with the court for the matter to be resolved through mediation on the mode of payment.
The lender said that property management firm Knight Frank valued the properties on July 15 and that several statutory notices had been issued, the first having been issued between December 2019 and July 2021 and another notification was issued on July 25, 2024.
In the dispute, his firms Dari Ltd and SAM Company Ltd entered into a facility agreement with the lender for a loan of $9.3 million(Sh1,199,661,328.49 at the current exchange rate) in 2015 to expand his business.
The loan was secured by several forms of collaterals, including an indemnity and guarantee agreement on April 10, 2015.
Tujuโs two properties Entim Sidai alongside Tamarind Karen and Dari Business Park, were charged as security for the loan.
The former CS accused the bank of failing to disburse the full amount thereby causing cash flow difficulties for the principal debtor.
This allegedly hindered its ability to fulfill its obligations under the agreement.
He said negotiations between the parties ensued in a bid to resolve the dispute and although a settlement agreement was drafted, the bank moved to a UK court and obtained a judgment against him.
Mr Tuju accused the lender of providing $9.1 million(Sh1,173,833,052.29)for the acquisition of the property but the balance of Sh294 million, which was meant for the development of high-end residential units for sale.
He said the sale of the units would have offset the loan.
The bank defended itself saying the balance was never disbursed because Dari Ltd breached the agreement by failing to pay $11,462,757(Sh1,478,554,059.18) as of November 10, 2017โฆCLICK HERE TO READ MORE ARTICLES>>>
