• How Credits (KCr.) are Awarded.

    Simply share and discuss to earn more credits which can be claimed as airtime or cash through Mpesa.

    Click here to see activities that help you earn credits.

    Happy Listing!

Bank Ordered to Pay Sh2.2 Billion to Former Taveta MP Basil Criticos for Auctioning His Farm

Currently reading:
Bank Ordered to Pay Sh2.2 Billion to Former Taveta MP Basil Criticos for Auctioning His Farm

Admin

Administrator
1651780835533.png

The Appeals Court has ordered the National Bank of Kenya (NBK) to pay former Taveta MP Basil Criticos Sh2.28 billion after auctioning his 15,994.5-acre sisal farm in 2007.

A three-judge bench found that the auction of the ranch in Taita Taveta was undervalued since there were buildings, sisal, quarry, and road network on the property.

Business Daily reports that the award is twice the lender’s Sh1.1 billion net income posted in the year ended December 2021.

The property was sold to the Settlement Fund Trustees (SFT) for Sh55 million to recover a defaulted loan of Sh20 million advanced to a company where Criticos was a director and a shareholder.

“In the result, subject to what we shall shortly state with regard to the crops, we find the appellant's valuation report to be solid in content and uncontroverted. It was not to be merely wished away. And we are on balance persuaded by the appellant’s contention that the suit property was sold at an undervalue,” Justices Roselyn Nambuye, Wanjiru Karanja and Patrick Kiage ruled.

Besides the award, the court directed the bank to refund Criticos Sh35 million, which was the surplus from the sale.

The judges also found the bank at fault for charging Criticos excessive interest rates, declining his offers to redeem the debt, and selling the farm at less than the amount he offered. These, the judges said, was a plain breach of a bank’s duty to act with care and in good faith.

“While we note that the charge had a condition granting the respondents the exclusive right to vary the rate of interest at any time without advising the chargee, we find it unconscionable and morally wrong that the bank would raise the interest rate from 19 percent per annum to the impossibly high rate of 35 percent per month, amounting to 420 percent per annum,” the judges said.

They added: “Our foregoing analysis leads to the inescapable conclusion that the appellant was treated by the respondents in a shabby and wholly unacceptable, if not tyrannous, the manner in the entire transaction.”

Criticos, a businessman, had lost the case before the High Court but he appealed.

His lawyer Allen Gichuhi faulted the High Court for failing to consider that the bank frustrated his client’s efforts to repay the debt by rejecting the Sh63 million he had offered.




Source: Mwakilishi
 
Top