Bank fights to recover Sh1 billion from Ruto hotel

Kenya’s largest bank formally joined the ownership dispute over the controversial land on which Weston Hotel stands.

Kenya Commercial Bank (KCB) wants to recover more than Sh1 billion it claims it is owed by the hotel associated with Deputy President William Ruto.

The bank will now be involved in a case where the Kenya Civil Aviation Authority (KCAA) sued Weston and National Land Commission (NLC) seeking to recover the 1.77-acre parcels.

Issuing loan

It claims the contested land had been cleared as Weston’s when it (bank) was issuing the loan.

Documents filed by the bank before Lands Court judge Bernard Eboso show that Weston secured several loans from the lender using the land now being claimed by KCAA as security.

According to KCB’s legal director Bonnie Okumu, Weston secured a Sh350 million loan on October 9, 2014, using the Weston land. The bank also lent the hotel $1.5 million (Sh150 million).

A year later on July 8, 2015, Weston again went for another Sh700 million and used the same land as security.

Beneficial interest

“There is a real risk that the applicant (KCB) may be rendered a mere bystander as orders which are adverse to its beneficial interests are granted to the petitioner.

“By the virtue of the registered charge and further charge, the applicant has extended banking facilities to the second respondent amounting to Sh1.5 billion and $1.5 million (Sh150 million,” court papers filed by lawyer Emmanuel Wetang’ula on behalf of KCB also read.

The lender argues that it gave Weston the loan relying on a confirmation from the Registrar of Lands that Weston was the registered owner of the land.

Weston and KCAA did not challenge an application by KCB and the judge allowed it to join the case yesterday.

Meanwhile, Weston’s lawyer Ahmednassir Abdullahi wants Chief Justice David Maraga to empanel a bench of three judges to hear the dispute filed by KCAA.

According to the senior lawyer, the issues in the case raise serious legal and constitutional concerns that require more than one judge to determine.

It also emerged that Mr Ahmednassir had filed an application to lockout Siaya Senator James Orengo from participating in the case on behalf of the aviation authority for alleged conflict of interest given his oversight role in Senate.

Three judges

However, Ahmednassir asked the judge to allow him to amend the application to include the prayer for more judges.

“This matter should be addressed with the seriousness it deserves by a panel of three judges,” argued Ahmednassir.

KCAA’s other lawyer Stephen Ligunya opposed Ahmednassir’s prayer, saying the case was straight forward for a single judge to settle.

Not replied

According to Mr Ligunya, Weston had not replied to the allegation that the land belonged to KCAA. He told the court three months had passed without any reply.

“We are of considered view that there is no complexity in the case. You allowed them to file their applications and replied from June 19. To date, the motion has not been responded to. My application remains unopposed,” submitted Ligunya.

KCAA, in its case, which is also against NLC, claims that the hotel illegally bought the land at Sh10 million from a travel agency – Priority Limited and Monene Investment Limited.

NLC had ordered Weston to compensate KCAA for the land at the current market price.

“In a bid to defeat the petitioner’s claim, the third and fourth respondent (Priority and Monene) subsequently sold off the land to the second respondent (Weston) sometime in June 2007 at a deliberately undervalued price of Sh10 million, perpetrating the fraud and illegal grabbing of public land,” KCAA claims.

KCAA claims Weston was built without requisite approvals from itself and other construction authorities.

“The second respondent (Weston), with the full knowledge of the petitioner’s lawful claim, procured the registration of the transfer in its favour and began rapid construction of the current development without bothering to seek or obtain development approvals from the relevant State regulatory agencies, including the petitioner,” court documents also read.

“The second respondent also consistently ignored and deliberately failed to comply with the petitioner’s orders to stop construction, despite clear indication that the then-upcoming development posed a threat to air navigation safety at the adjacent Wilson Aerodrome.”

Ownership row

While opposing KCAA’s case, Priority Limited, in its court papers filed by lawyer Katwa Kigen, claimed it was the legitimate owner of the contested land.

According to Priority, a register kept by NLC in its name was proof of ownership.

“The third respondent (Priority) was the owner of the land parcel to the exclusion of all others who are not registered, including the petitioner (KCAA) herein,” Priority’s reply reads.

The judge extended orders barring NLC from evaluating the land in a bid to compensate KCAA.