By Misfit
Former Cabinet Secretary Raphael Tuju is facing a new challenge as two of his multibillion-shilling properties in Karen, Nairobi, are slated for auction. Garam Investments Auctioneers has announced the sale of Dari Coffee Garden and Entim Sidai hotels, with the auction scheduled for October 1, 2024.
Auction Details
Properties for Sale: Dari Coffee Garden and Entim Sidai hotels
Bid Deposit: Sh10 million per property, payable via banker’s cheque or cash
Auction Date: October 1, 2024
The move has been described by Mr. Tuju as malicious, given ongoing legal disputes. Tuju contends that both the East African Development Bank (EADB) and the auctioneer were aware of a court order he secured, which directs that the status quo be maintained until a High Court petition is resolved.
Legal Context
Mr. Tuju’s case involves a long-standing conflict over a loan agreement with EADB. According to Tuju, Justice Alfred Mabeya had ordered that no actions be taken to auction the properties until the court resolves the issue, as the borrower is willing to repay the loan. Justice Mabeya’s ruling emphasized maintaining the status quo to address these complex issues.
The legal battle centers around a 2015 loan agreement, which Tuju argues was supposed to be disbursed in two phases: $9 million for land acquisition and Sh290 million for property rehabilitation and villa construction. Tuju claims the bank failed to release the second tranche, and repayment was contingent on the sale of the villas. This claim was affirmed by the bank’s official during recent cross-examination.
Conversely, the bank alleges that Dari Ltd breached the agreement by not repaying $11,462,757 by November 10, 2017. This led to the bank demanding immediate repayment and pursuing legal action in the UK against Dari Ltd and its guarantors, including Tuju.
On June 19, 2019, UK Judge Daniel Toledano ruled against Dari Ltd and the guarantors, awarding the bank $15,162,320.95. The bank then sought recognition of this judgment in Kenya, which was granted on January 7, 2020. Despite attempts to overturn the UK judgment, including a rejected application and ongoing Supreme Court proceedings, the bank appointed PwC as receivers for the 20-acre property and high-end Dari hotel.
However, Tuju obtained a court order to halt PwC’s management, adding another layer of complexity to the ongoing legal dispute.
Upcoming Court Decision
Justice Mabeya is set to rule on Tuju’s application on September 18, which could influence the outcome of the property auction.
This high-profile case continues to unfold, highlighting the intricate legal and financial issues at play. Stay tuned for further updates on this developing story.
