Bank recants evidence in loan dispute with Raphael Tuju
Mr Raphael Tuju's Dari Restaurant grounds.
An East African Development Bank (EADB) official has recanted part of his evidence contained in an affidavit presented in court in a loan dispute with former Cabinet secretary Raphael Tuju.
Appearing before High Court judge Alfred Mabeya, David Odongo said some claims contained in an affidavit filed in court by the bank opposing Mr Tuju’s case were not entirely true.
Mr Odongo further confirmed before Justice Mabeya on Wednesday last week that he did not appear before a commissioner for oaths to give the statement.
“I received instructions from the bank’s legal officer to go and sign the affidavits,” he said, adding that he signed the affidavits in good faith.
Among the claims he said were not accurate were that Mr Tuju’s restaurant- Dari was generating revenues and profits that would be sufficient to meet the repayments of the loan.
Justice Mabeya will make his ruling on the matter on September 18.
The official who was being re-examined by the bank’s lawyers further confirmed that the loan agreement with Mr Tuju’s Dari Ltd was two-phased but the lender only disbursed phase 1 of the loan.
According to the witness, the first batch of the loan was for the acquisition of the land while the second phase was meant for development of villas, which were to be sold to service the loans.
He said proceeds from food and beverage from the restaurant could not service the loan without undertaking the real estate, the villas component of the project.
In a statement given to the Directorate of Criminal Investigations in December last year, Mr Odongo stated that the bank’s board approved the two phases of the loan, $9 million from the acquisition of the land and a further Sh290 million for the rehabilitation of the existing structures and construction of some demo villas.
He said EADB introduced a requirement for Mr Tuju to pay 10 percent of the purchase price of approximately Sh97 million, which he paid but the bank failed to disburse Sh290 million was never disbursed.
Mr Odongo said the repayment of the loan was dependent on the development and sale of the villas.
However, according to the bank, the balance was never disbursed because Dari Ltd breached the agreement by failing to pay $11,462,757 as at November 10, 2017.
Mr Odongo, however, recanted the claim that Mr Tuju requested an extension for the satisfaction of the outstanding conditions precedent under the loan agreement.
When Dari Ltd failed to service the loan, the bank issued a demand for immediate repayment and soon filed a suit in the United Kingdom against the company and the guarantors —Mr Tuju, his children and S.M. Company Limited.
In a judgment on June 19, 2019, Judge Daniel Toledano of the High Court of Justice Business and Property Courts of England and Wales, entered summary judgment against Dari and guarantors, jointly and severally, for $15,162,320.95.
To enforce the decision, the Bank moved to the High Court for recognition of the judgment. The decision was adopted on January 7, 2020, as provided under the Foreign Judgment (Reciprocal Enforcement) Act.
Dari ltd filed an application before the High Court, for setting aside the UK Judgment but it was rejected and the matter escalated to the Supreme Court.
