A signage showing Faulu Kenya Microfinance Bank. The financial institution has been sued for auctioning a property in Kericho.
On November 10, 2015, Kennedy Kimutai Salat was approached by a friend Robert Kanuli, who sought financial assistance to expand his business.
Mr Kanuli, director of Kanuli Information Technology Solutions Limited, asked Mr Kimutai to guarantee a Sh11 million loan he was seeking from Faulu Microfinance Bank.
Mr Kimutai agreed to guarantee Sh5.6 million of the loan and offered the title deed of his prime property in Kericho as security.
Nearly a decade later, he was shocked to receive a redemption notice and a notice of sale dated July 1, 2024, from Antique Auctioneers, informing him that the bank intended to auction his property to recover Sh32.9 million, which Mr Kanuli had defaulted on.
Before he could process the situation, the bank went ahead and sold his property through a public auction in February 2025 to a buyer, Emmanuel Kibet Kirui, for Sh13 million.
Things moved so quickly that when Mr Kimutai conducted a search at the lands office, he discovered the property had already been transferred to Kirui.
Left in shock, he questioned how the bank had treated his limited guarantee as security for the entire debt owed by Mr Kanuli. He also wondered how the loan, initially Sh11 million, had ballooned to Sh32.9 million.
"Illegal actions"
Mr Kimutai’s anger was directed at the bank, which he accused of undervaluing his property — worth Sh32.5 million — and selling it for only Sh13 million at auction.
The distraught man has now moved to court seeking to reclaim his property, which he says was lost through illegal actions by the bank in collaboration with his former friend.
In a case filed through GKL Advocates on September 20, Mr Kimutai is asking the court to stop the bank and the new owner from further dealings with the property.
Milimani Law Courts in Nairobi.
He argues that the bank breached the charge agreement by demanding that he repay the entire Sh39 million debt, despite his liability being limited to the Sh5.6 million he had guaranteed.
Mr Kimutai wants the sale of his property at the undervalued price declared illegal, null and void and subsequently cancelled.
He also seeks to be discharged from any liability beyond the guaranteed Sh5.6 million.
“I have been deprived of property valued at Sh32.5 million while my liability under the charge instrument was limited to Sh5.6 million. Accordingly, I have suffered pecuniary loss and stand to lose irreparably unless the property is preserved pending hearing and determination of this suit,” said Mr Kimutai.
In directions issued on September 25, Justice Linet Omollo ordered Mr Kimutai to serve the parties with the case within seven days, after which they should file responses within 14 days.
The matter will be heard on November 11.
