KCB DEFENDS WESTON HOTEL IN ROW WITH GOVERNMENT AGENCY.

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BY SAM ALFAN.

Kenya Commercial Bank has told the Environment and Land court that Weston Hotel used the title to the land on which the property stands, to secure more than Sh1 billion loan.

In documents filed in court through Mohammed Muigai law firm, the bank said before issuing the loans to the hotel, it conducted official search and got assurance that Weston Hotel is the duly registered proprietor of the land with an undefeatable title.

“At the time of registration of the charge and further charge, the interested party (KCB) exercised due diligence and fulfilled all prerequisites to registering a chargee’s interest in land as required by law,” said KCB’s director of legal service Bonnie Okumu.

It was on the assurance the Registrar of land that the bank agreed to advance the loan facilities to the Weston hotel “on the firm understanding, belief and legitimate expectation that in case of default by the hotel, the bank would be entitled to exercise its statutory power of sale over the suit property”.

The court heard that the first charge dated October 9, 2014 was registered on October 27, 2014, securing a loan of Kshs350 million and US $ 1,500,000. The second charge dated July 8, 2015 was registered on July 27, 2015 and the hotel secured additional loan facility of Kshs700 million.

In response to a petition challenging the ownership of the said property by KCAA, the bank said Weston hotel is still repaying loan facilities and there are still outstanding amounts owed to the bank.

The bank said the orders sought by KCAA, for the cancelation of the title held by Weston would prejudice the lender as it would lose its money.

The Bank said the National Land Commission in its report recognized it’s equitable interest in the suit property and acknowledged that it would lose if the allocation of the title, was declared and illegal.

Okumu said in an affidavit that the bank is a publicly owned and listed on the Nairobi Stock Exchange (NSE), the Uganda Securities Exchange (USE), the Rwanda Stock Exchange (RSE), and Dar-Salaam Stock Exchange (DSE), and such loss would prejudice depositors throughout the Eastern and Central African region.

She urged the court to consider that the equitable interest held by the bank, the fact being that the bank exercised due diligence and the reliance on the assurance given by the Registrar of land and titles that the title to the property was genuine and authentic.

Priority limited through lawyer Katwa Kigen told the court that they were exclusive owner of the disputed property.

Affidavit by Priority Limited director Paul Chirchir , the company told the court it was the owner of the land parcel to the exclusion of all others who were not registered including KCAA and according to the record he has seen , KCAA has never been a registered owner of the parcel.

” On the face of the pleadings and annexures thereto the petitioner (KCAA) has no viable or worthy evidence upon which it can lay a competing interest to Priority limited’s title. Otherwise and without prejudice to whatever the averments , in any event, the petitioner has never been the owner and or registered proprietor hence has no rights and entitlements to the parcel as pleaded or at all”, said Chirchir.

Chirchir said the allegations of improprieties and allegations or fraud on the Priority limited are denied. The company denied any impropriety in the registration, any unlawful on any allocation to the land and committing any acts of illegality , fraud or corruption on any dealings in relations to the parcel including allotment , registration and conveyance.

The company dismissed allegations of any forceful eviction KCAA, DCA or employees and any forceful eviction would have attracted the state power, personnel and accessories as the KCAA is a state body would have provoked the appropriate legal actions at the point of the alleged eviction.


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