Banks fight over loan as Tuju gets stay order

The Sh1.6 billion loan dispute between East Africa Development Bank (EADB) and Jubilee Secretary General Raphael Tuju has taken a new twist with the lender now training its guns on Bank of Africa (BOA).

This comes even as Tuju got a temporary reprieve yesterday after Court of Appeal halted implementation of a judgement by United Kingdom court to attach his property.

Court of Appeal judges Martha Koome, Mohamed Warsame and Jamila Mohamed barred EADB from seizing and disposing assets which Tuju had offered as security for a loan advanced to his company, Dari Limited, for property development.

However, the orders will only be enforced if Tuju deposits Sh50 million in a joint account within 30 days, failure to which his application will stand dismissed.

“We observe that the respondent holds security being legal charges over LR No 1055/165 and LR No 11320/3 under the facility agreement and are satisfied the applicants would suffer substantial loss if the impugned judgement is executed,” the judges ruled.

High Court Judge Wilfrida Okwany had given the regional bank a go-ahead to attach Tuju’s property, saying he had an opportunity before the United Kingdom Court of Appeal, which he equally lost.

According to Justice Okwany, Tuju’s prayers amounted to asking the Kenyan Court to sit on appeal of the UK Court. She observed that her role after the judgement was ceremonial, to just validate its enforcement in the country.

Earlier, Tuju and EADB had agreed to have the former Rarieda MP open two accounts, an escrow account and a debt service account with BOA to secure the loan for purchasing a property in Nairobi known as Tree Lane, and developing residential houses for sale.

EADB accuses BOA of breaching an agreement requiring it to notify the regional bank whenever withdrawals or transfers of money from the escrow account opened in its favour back in 2015 were made. Tuju’s loan now stands at Sh1.6 billion.

“BOA breached obligations under the escrow account agreement because it permitted such withdrawals or transfers without prior consent from EADB,” a letter written by EADB’s head of business in Kenya Loise Muigai to BOA reads in part.