Vihiga MP Yusuf Chanzu risks losing prime land over loan default

Vihiga MP Yusuf Chanzu. The MP has to raise security for the Sh45 million loan, which he owes Equity Bank by today morning when the auction is expected to take place or he loses his matrimonial property.   (PHOTO: ERIC LUNGAI/ STANDARD)

Vihiga MP Yusuf Chanzu risks losing his property to auctioneers.

The MP has to raise a security for the Sh45 million loan, which he owes Equity Bank by today morning when the auction is expected to take place or he loses his matrimonial property.

This is after the High Court threw out a case filed by his wife, Jamila Oyoo, seeking to block the sale of the one-and-half acres in Karen, Nairobi.

High Court judge Mbogholi Msagha ruled that even if the MP was to be given 45 days to repay the loan as he had asked, there was a likelihood of him defaulting as he had previously done so.

Mr Chanzu had sued the bank in 2009 over a Sh19 million loan he took on behalf of Capital Construction Ltd.

The default interest plus the capital amount claimed by the bank as at January 15, 2009 was Sh640 million. He got temporary orders from judge Muga Apondi who noted that the lender could not explain how the money had shot up from Sh19 million to Sh640 million.

But he could not celebrate for long as three years later, in 2012, judge Joseph Mutava lifted the orders, noting that the MP had willingly agreed to take the loan, which attracted an 18 per cent interest yearly, and a further six per cent interest in case he defaulted to pay.

"I have taken some time to go through material presented before me. It is not the first time the property in question is subject to litigation. Mr Chanzu was the applicant while the applicant now is Jamila Oyoo Chanzu, the spouse of the former. There is evidence that the husband of the present applicant had been allowed to post security to secure a stay order. That order was not obeyed to the detriment of the respondent," judge Msagha ruled yesterday.

The MP did not give up. He moved to the High Court, before judge Erick Ogola on April 16, 2013 seeking to put the sale of the property on hold pending an appeal.

Justice Ogola granted Chanzu his prayers but on condition that he pays Sh19 million within 30 days.

"There is no evidence that the plaintiff (Chanzu) has been paying the sum due or that he has pledged to pay the sum due. A court of justice must consider the plight of all the parties. Equity Bank's right to sell the mortgaged property is statutory and cannot be taken away except when it is clear that Chanzu is also anxious to redeem his property," said Ogola.

The MP then tried his luck before Appellate judges Kihara Kariuki, Patrick Kiage and Kathurima M'noti but they too, on June 27, 2014, dismissed his pleas on account that he never bothered to issue a security as Ogola had ordered and at the same did not make any efforts to clear the amount.