Land row muddles Sh145m recovery by Consolidated Bank

Consolidated Bank is entangled in a complex land battle in which four different parties are claiming ownership, even as the lender seeks recovery of an unpaid loan through auction of the Sh145 million property.

The bank has since January, 2020 been seeking to auction the 4.2-acre land in Thika town to recover a loan secured by one of the property’s claimants, Frank Logistics, as three separate court cases continue in court.

Frank Logistics used the land as loan security in 2017, while guaranteeing a loan that Consolidated Bank released to another company – Rieny Distributors.

Interestingly, the loans to Rieny Distributors were disbursed through 20 different bank accounts, and largely remained unpaid for two years.

The lender has been unable to secure a buyer since last year.

In May, Justice Mary Muigai ruled that Frank Logistics failed to present evidence that the lender’s move to auction the property was illegal. Consolidated Bank initially sought Sh190 million from Rieny Distributors and Frank Logistics but dropped its demand to Sh56 million.

“The correspondence demonstrates that Consolidated Bank availed Frank Logistics an opportunity to regularize the facilities’ accounts vide a letter dated August 16, 2019. Consolidated Bank fully disclosed service of statutory notices and valuation of the suit property was conducted… The court is not in doubt that a prima facie case is not made out,” Justice Muigai ruled before allowing the lender to proceed with the auction.

Frank Logistics says it acquired the land in 2011 from the Kiambu County government.

The firm was in 2015 sued by Kimuri Housing Company Limted over the property.

Kimuri Housing says it was allocated the property by the Commissioner of Lands in 1999, and that it took possession immediately.

Kimuri Housing’s case against Frank Logistics had been dismissed last year over non-attendance by the plaintiff. But the court reinstated the suit following Kimuri Housing’s application.

Businessman Samuel Ndichu Kuria is the newest entrant in the battle, as he plans a suit against other claimants.

Mr Kuria argues that he owns the land, and is surprised that there have even been attempts to auction the property.

But even before taking on Frank Logistics, Kimuri Housing was battling Julius Ngwirika Ruhiu and his JR Investments Limited.

Mr Ruhiu claims that he bought the land from former Kamenu Ward representative Elizabeth Muthoni Hussein in 2011 after conducting due diligence that included a search at the Ministry of Lands.

Mr Ruhiu’s documents indicate that Ms Hussein acquired the land in 1996 following an allocation by the Commissioner of Lands.

He sued Kimuri Housing in 2011 through his JR Investments Limited, demanding the land and Sh515 million in damages.

In the same year, Kimuri Housing sued Mr Ruhiu seeking over the land.

Consolidated Bank’s planned auction risks dragging more individuals into the battle, as the three court cases proceed in court.