Moi University bank accounts attached over Sh185m debts

Moi University’s bank accounts have been attached over Sh185 million debt owed to a contractor.

Justice Anthony Mrima sitting in Eldoret ruled that Sh132.7 million will be attached in both the National Bank and Cooperative Bank accounts held by the university.

Mrima certified as urgent an application by the company through its lawyer Nelson Havi dated August 16, 2024.

Further, the judge ordered that in the meantime, Sh109.3 million plus Sh23.4 million held in two National Bank accounts be attached pending further orders from the court.

.

Keep Reading business

•  Coffee cherry fund advance to farmers up by 500pc to Sh6.7 billion
•  Standoff at East Africa Portland Cement as employees protest against new management
•  Impact of Finance Bill withdrawal hits State revenues, projects hard
•  Kenya, Madagascar Partner to Boost Horticulture and Jobs
•  Top 10 most reliable and budget-friendly cars in Kenya Premium

“Sh109.3 million and Sh23.4 million or any part thereof held in an account by the Co-operative Bank of Kenya Limited are hereby attached pending further orders of this court,” ruled Mrima.

The court directed Vishva Builders Limited to ensure that the total amount of money attached does not exceed Sh132.7 million.

The National Bank, through its Branch Operations Manager Simon Kamau, said it was ready to comply with the orders.

Kamau in documents filed before court on August 20, said the bank was ready and willing to comply with the court orders, to the extent of the amounts presently held in the accounts.

According to Kamau, by August 19, Moi University had Sh13.04 million in one account and Sh410,337 million in another account.

The order followed an application claiming the university is indebted to Vishva to the tune of Sh109,320,832 on account of a decree made on July 29, 2019.

“The respondent (university) is indebted to the applicant (Vishva) in the sum of Sh23,422,859, on account of bill of costs dated November 8, 2019,” said the company.

According to the firm, the university has failed to settle the total amount it owes Vishva, four years since the university gave the company a payment plan which has not been honoured to date.

“The applicant is apprehensive that the respondent has not prioritized payment of the debt and feels that the respondent has no intention to pay the debt,” the company told the court.

The university had for the past few months suffered another attachment of its accounts by the Kenya Revenue Authority for failure to pay taxes and experienced strikes by workers and staff for non-payment of salaries.

The risk of the university deteriorating further in its financial means and ability to pay debts necessitates the filing of the case during the August vacation, the firm argued.

The university, according to the petition, operates two accounts at the National Bank and one account at the Cooperative Bank.

The dispute between Vishva Builders and Moi University dates back to 1990, when the company was awarded a tender to construct the Faculty of Science building.

The company said on May 24, 1990, it tendered for a contract worth Sh476.37 million with Moi University Phase 1 and it was accepted.

A formal contract, Vishva said, was agreed between the parties, which was to take 130 weeks from June 21, 1990.

Vishva said it raised a certificate for complete works amounting to Sh242 million, but the university only paid Sh57 million, defaulting on Sh185 million.

Vishva’s Managing Director Ramji Vekaria moved to court and said seven valuations were not paid and the work stalled.

In its defence, the university said the agreement was never executed in accordance with the law as the Bill of Quantities (BQ) was never executed.

However, it admitted that it was unable to raise funds to complete the project and it was halted in April 1991 when about nine percent of the works had been completed.

However, the High Court in Eldoret ordered the university to pay Sh185 million. In his verdict, Judge Wananda Anuro noted that the university and Vishva builders had entered into agreement.

“I, therefore, find that both the BQ and the Contract Agreement were properly executed by both parties and bound the parties for all intents and purposes,” the Judge ruled.

Report by Stephen Rutto, Daniel Chege and Julius Chepkwony