How Moi stalwart Kiplagat plunged deeply into debt 

The son of Isaac and Zipporah Salgong died on February 6, 2021 while being rushed to hospital by his family, following a short illness.

Auctioneers

For Mr Kiplagat, the post-Moi era threw him into a series of cat and mouse games with auctioneers and people claiming land that he also had an interest in retaining.

From a failed fight over a piece of land in Nakuru with tourism entrepreneur John Allan Okemwa to battling a Karen neighbour who put up a borehole near his Karen home, Mr Kiplagat spent a good chunk of his last days in court.

Perhaps the most monumental court fight the former Kanu power broker fought, and lost, was the recent attempt to swat off an auction of two properties that held significant spaces in his now chequered legacy.

Moi’s relative

Aside from being a close confidante and advisor of former President Moi, Mr Kiplagat was a relative of the man who held the highest seat in Kenya for 24 years.

Mr Moi and Mr Kiplagat’s mother were maternal cousins.               

He was better known as HK. So much that in some court cases judges referred to him as HK, even when his full name was spelled out in affidavits.

The first real attempt to go after Mr Kiplagat was by the Kenya National Trading Corporation (KNTC) in 2005.

The state agency attempted to auction a Mercedes Benz and Mitsubishi Pajero that Mr Kiplagat owned through his Integrated Wood Complex.

The vehicles had been purchased through loans from Cooperative Bank of Kenya and were still registered to the lender.

Cooperative Bank then objected to the planned auction, arguing that the vehicles were still registered in its name and that they stood to lose if KNTC was allowed to sell them.

In the same year, Mr Kiplagat sued tourism entrepreneur John Allan Okemwa for allegedly trespassing on his land in Nakuru.

Longest legal battle

The case would become Mr Kiplagat’s longest legal battle as it was settled by the Court of Appeal in 2018, in a decision that granted Mr Okemwa the prime property.

Last month, High Court Judge David Majanja allowed the Bank of India to auction Mr Kiplagat’s plush Karen home valued at over Sh455 million, and a number of properties he owned in Eldoret town and whose value was not disclosed in court papers.

Mr Kiplagat owed the Bank of India Sh271.4 million that was disbursed through two companies – Eldoret Concrete Poles Limited (Sh86.11 million) and Timber Treatment International Limited (Sh185.3 million).

The court proceedings indicate Mr Kiplagat could have been broke as he constantly failed to honour Bank of India requests to regularise the loan accounts.

At least, until Garam Auctioneers came calling in June, 2020.

Garam had been instructed by Bank of India to recover Sh271.4 million from Mr Kiplagat’s two companies and the former Cooperative Bank boss opted to try his luck with the courts to stop a looming loss of his assets.

Earlier meetings with the lender were not successful as Mr Kiplagat constantly promised to catch up with the loan repayments, but failed to keep his word.

The High Court dismissed two cases that Mr Kiplagat’s companies filed to stop planned auctions in Nairobi and Eldoret.

The Nairobi home boasts of a three-bedroomed main house, a two-bedroomed guest house and a three-bedroomed servants’ quarter.

The five-acre property also has a two-floor conference centre and an entertainment block with a swimming pool and a squash court.

Mr Kiplagat had also put up three greenhouses and beehives on the Karen property.

The Eldoret land has 20 residential units, an office block, a timber treatment plant, a weighbridge and warehouses.

After ignoring Bank of India’s demands to repay the outstanding loan amounts, the lender engaged Garam Investments Auctioneers to go after Mr Kiplagat’s companies – Eldoret Concrete Poles Limited and Timber Treatment International Limited.

Timber Treatment International Limited used 13 pieces of land in Eldoret as security.

On March 27, 2020 the lender’s lawyers met with counterparts representing Mr Kiplagat’s companies, where it was agreed that Eldoret Concrete Poles Limited and Timber Treatment International Limited would write a letter to Bank of India requesting for 90 days to regularise the loan repayments.

Wasted opportunities

Mr Kiplagat’s companies accused the bank of ignoring the 90-day request, but the lender now says it simply rejected the extension appeal because the two firms had previously wasted opportunities to amicably resolve the matter.

Bank of India then engaged Garam Investments Auctioneers to pursue the debt by issuing a notification of intention to sell several properties used as security, among them Mr Kiplagat’s palatial Karen home valued at more than Sh450 million.

Mr Kiplagat then promised to deposit Sh50 million that would be sufficient to regularise the loan account.

He failed to deposit the money and Bank of India went after the securities.

When the two companies sued Bank of India to stop auction of their assets, Mr Kiplagat told the court that the defaults were as a result of the Covid-19 pandemic that has hit economies and businesses worldwide.

But Bank of India furnished Justice David Majanja with evidence that the default started in 2019, before Kenya recorded its first case of Covid-19.

Justice Majanja has now ruled that Eldoret Concrete Poles Limited and Timber Treatment International Limited did not contest the process Bank of India used to initiate the planned auction of assets, hence there is no reason to stop auction plans by the lender.

In regard to Mr Kiplagat’s Karen home, the judge said that it is registered to the former Cooperative Bank chairman, and not to Eldoret Concrete Poles Limited.

The judge held that the owner of the land, Mr Kiplagat in his personal capacity, would have been the right party to contest auction of the Karen home.

Mr Kiplagat filed affidavits in his capacity as an official of the two companies.

Separate legal entities

Under Kenyan law, companies are separate legal entities from their owners hence one cannot claim to stand in for the other unless there is written authority to that effect.

“As the chargor (Mr Kiplagat) has not laid any complaint regarding the exercise of the bank’s statutory power of sale. It is not a party to this suit. As the plaintiff (Eldoret Concrete Poles Limited) does not have any proprietary interest in the suit property, it has not established a prima facie case with a probability of success. A further inquiry will not serve any useful purpose,” Justice Majanja ruled.

As for Timber Treatment International, Justice Majanja ruled that the company had admitted to owing Sh185.3 million to Bank of India and that court proceedings show that the lender followed the law in initiating the auction process.

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