You do not want to be Shreedhar Girdharlal Hirji who is regretting why in the hell he took a loan of Kes43 million from Mwananchi Credit and now risks losing property worth hundreds of millions at LR No. 2327/252, at Hardy, Karen, in Nairobi.
Mr Hirji, who trades as Harrogate Ltd and Alice Muthoni Thuo, told court that only Kes7.5 million of the loan was disbursed after which the loan shark owned by Dennis Mombo, who is associated with media personality Linda Ogutu, claimed she had fallen back on payments and sought to auction the property.
As he set out to fight the case in court disputing the loan amounts, Mistan Auctioneers advertised the property and sold it in October last year; and in November, Mr Hirji received an eviction notice.
On follow-up, he opened a new battlefront only to discover that the property had been sold at a lower value than what it was worth in an auction that had two participants, one of whom was allegedly the son of the auctioneer.
Although the auctioneer Ms Mary Rita Wanjiku denied one of the bidders, Mr Staneley Wanyoike, was her son or that he ran a Facebook account for her in which he posted pictures where they appeared together, her supplementary affidavit was rejected after the court heard that it was sworn by another party, Sylvia Wanjiru Njoroge.
The property was sold to one Alexander Kubo Mlawasi for Kes135 million after which he allegedly paid Kes33.7 million in cash and walked away without even demanding a valid receipt.
Court documents show that the land valuation report relied on during the sale was unsigned and there was no evidence the two bidders paid the prerequisite Kes1 million to participate in the auction.
Judge Alfred Mabeya has frozen the auction stating the process was ‘rot in bad faith’ and wondered out loud why such a huge transaction was being done on a cash basis without a due paper trail.
“According to the condition of sale, the deposit was payable by bankers cheque. The question that begs is how would such a colossal sum be transported to the auction, be handed over to the auctioneer at the close of the auction, and then be transported to the defendant?”
“Why would the alleged purchaser be accommodated and deal with a sale outside the express conditions of sale that required a banker’s cheque? Isn’t the law that huge transactions should be conducted by way of bank transfers in order to curtail money laundering? This is a serious triable issue that can only be determined at trial,” he said.
As tough economic times bite hard, many individuals and companies are finding it hard to meet loan payments forcing lenders to put their property on sale.
Mr Justice Mabeya said that even as lenders exercise their rights to attach property, the processes must be above board not to abuse their customers’ constitutional rights.