A local bank has sued Mining Cabinet Secretary Hassan Ali Joho as it seeks to recover Sh54.5 million loan arrears.
SBM Bank (Kenya) Ltd says Mr Joho operated a loan account with it and was the beneficiary of a facility advanced by Chase Bank (Kenya) Ltd, through a letter of offer dated December 16, 2013.
SBM Bank, which acquired 75 percent of Chase Bank almost six years ago, says that on or about January 3, 2014, Mr Joho took a Sh40 million loan under Islamic banking principles.
In its case filed on November 6 at the High Court in Mombasa, the lender says that Mr Joho failed to provide the original title deed of a property used to secure the loan
“The loan disbursed was to be secured by a first legal charge over Apartment 42, Tamarind Village, Nyali Mombasa," part of the case documents filed in court state.
However, SBM Bank alleges that the CS failed to provide the original title deed for purposes of registration of the charge despite several requests made to him, adding that he also failed to sign the charge document.
It argues that the loan advanced to Mr Joho was to finance the purchase of an apartment at Tamarind Village to be secured by the same property.
According to the bank, Mr Joho maintained an account with it in which the loan was to be paid.
“In a flagrant breach of the terms of the subject contract, the defendant failed, neglected and refused to make good the payment of the monthly installments, hence the account remained in arrears to the detriment of the bank’s interests,” case documents filed in court state in part.
The bank further says that upon numerous reminders between 2014 to 2021, only partial payment of Sh20.25 million was netted off...leaving outstanding arrears of Sh54.5 million as at August 1.
SBM Bank says that the loan matured and stopped accruing profit on January 3, 2024, as per Islamic Banking Principles.
“Due to the defendants’ default, the plaintiff could not issue the relevant statutory notices in a bid to exercise its statutory power of sale under the charge instrument as the transfer and charge were not registered as the defendant failed to provide title deed,” argue SBM Bank.
According to the bank, the exercise of its statutory power of sale was frustrated and the only other available option for the plaintiff was to seek court’s intervention to recover the outstanding amounts.
“Despite issuing several demand notices to the defendant requesting him to make good of the default, he has neglected, failed or refused to make any payment whatsoever necessitating the plaintiff to file this suit,” says the bank in its court documents.
SBM Bank Manager debt recovery department Mr Peter Chege, in his witness statement, says that the loan accounts stand in arrears of Sh54.5 million and the outstanding principal and profit continues to accrue default charges at the rate of 20 per cent until payment in full.
“I therefore humbly request this court to enter judgement against the defendant plus costs and interests of the suit,” says Mr Chege.
