Ex-MP Philip Okundi risks losing prime property over Sh35m debt

A prime property belonging to former Rangwe MP Philip Okundi risks being auctioned over a debt of Sh35 million.

Mr Okundi, however, got a temporary reprieve after the High Court dismissed an application by Mayfair Bank which sought to strike out a petition against Asego Holdings, a company associated with the former legislator.

He moved to court seeking to permanently restrain the lender from auctioning the apartment on Thompson Estate in Lavington, Nairobi.

Justice Alfred Mabeya rejected the application by the bank saying although Mr Okundi’s Asego Holdings had filed a similar suit before a Milimani magistrate’s court, the case had since been withdrawn.

The judge noted that the case was withdrawn after the former MP discovered that the magistrate did not have the powers to determine the case, a subject matter above Sh35 million.

“In this regard, I find no basis for the preliminary objection and hereby dismiss the bank’s application with costs to the plaintiff (Asego Holdings),” the judge said.

Mr Okundi said in an affidavit that he charged the property and secured an overdraft of Sh25 million granted to a Mr Edward Kenneth Otieno Okundi. He said the overdraft was limited to three months from June 17 to September 15, 2020.

The former legislator said the lender failed to notify his firm of any breach arising from the overdraft and after perusing bank statements, he established that as at October 2020, Mr Otieno was within the limit of the overdraft facility.

Notice

However, the lender advertised the property for sale through Legacy Auctioneers without informing him of the breaches by Mr Otieno.

He further faulted the bank saying it failed to issue a 90 days statutory notice and the 40-day window to sell the property as required by law.

Mayfair Bank later filed an objection to the case, pointing out that the company had lodged a similar case before a magistrate.

The bank through Ms Lynette Kamande opposed the case saying the lender first advanced a loan of Sh15 million on June 5, 2018, which was secured by the property.

She said there was a second offer in which the bank extended another overdraft of Sh25 million, secured using the property and a corporate guarantee of a similar amount on June 19, 2020.

The bank said Mr Okundi accepted the terms of the guarantee and agreed to be legally bound by them. The borrower then defaulted and the bank issued statutory notices to both Mr Otieno and Asego Holdings and directed the auctioneer to issue a 45-day notification of sale.

The bank disclosed that the borrower and the company owed the bank Sh34 million as at December 31, 2021.

It was further revealed that Mr Okundi was a director of Asego Holdings and both had been served with the statutory notices.

Ms Kamande stated that Mr Okundi failed to inform the court that there was a pending case at the magistrate’s court.

In his ruling, Justice Mabeya observed that although it was not disputed that the company had filed a suit at the magistrate’s court over the same subject matter, the case was withdrawn upon discovery that the lower court lacked the powers and pecuniary jurisdiction to determine the matter.

On January 30, Egypt’s Commercial International Bank (CIB) announced the full acquisition of Mayfair Bank.

The Central Bank of Kenya (CBK) granted the consent to CIB to purchase the remaining 49 per cent shares in Mayfair after the earlier acquisition of 51 per cent stake in April 2020.

Politician Peter Kenneth, lawyer Ambrose Rachier and city tycoon Amos Gichuki Ngonjo became the top beneficiaries of the buyout and are set to receive $40 million (Sh4.98 billion) for the sale of their remaining stakes.

Mr Kenneth, the founder of Mayfair Group which started as Mayfair Insurance, is among the investors who teamed up in 2017 to establish the bank that targets large and medium-sized firms and high-net-worth individuals.