Bank sues ICDC chair over loan

A bank has taken the newly appointed Industrial and Commercial Development Corporation (ICDC) Chairman John Ngumi to court after he defaulted on a loan given two years ago.

I&M Bank is demanding at least Sh17 million from Mr Ngumi, alleging that its quest to have him honour his obligations has fallen on deaf ears.

Ngumi was the chairman of Kenya Pipeline Company until his appointment by President Uhuru Kenyatta to head the ICDC board on August 7, 2020.

In suit documents filed at the Milimani Commercial Courts, I&M lawyers G&A Advocates told the court that sometime in January 2018, Ngumi approached the bank seeking a Sh15 million loan.

The bank said that Ngumi was to pay interest at four per cent above the interest rate set by the Central Bank of Kenya.

However, G&A Advocates claim that when the time for him to repay the loan fell due, he was silent.

According to the lawyers, the bank sent Ngumi a letter in January this year reminding him to pay the money but he did not yield.

“The plaintiff avers that despite sending the defendant the demand letter and several reminders notifying the respondent of his indebtedness, there has been no attempt to settle the outstanding amount,” they said.

“The actions of the defendant amount to breach of terms of the letter of offer and contractual agreement. Despite demands made and intention to sue intimated, the defendant has failed, neglected and or refused to pay the said sum of money and persists in the said breach.”

The bank claims it is suffering losses as a result of the unpaid money.

I&M’s Debt Recovery Assistant Manager Ernest Wanjohi Muthoni said the lender opted for court intervention after its effort to have Ngumi settle the debt hit a dead end.

He claims that Ngumi has been acknowledging his indebtedness.

“It has necessitated the bank to instruct its advocates to institute the present proceedings for the recovery of outstanding sums, which at the time of filing this suit stood at Sh17.1 million,” Mr Wanjohi said in the suit.

The ICDC chairman is said to have used a piece of property in Kangemi, Nairobi, as security.

The bank wants the court to force him to pay the amount, which should factor in a 14 per cent interest rate or at the current rate if higher.