Brothers seek part in Sh2.2b debt case

The Nakuru High Court will next month rule on an application by former directors of Milling Corporation of Kenya against Standard Chartered Bank over Sh2.2 billion debt.

Justice Janet Mulwa set February 27 as the ruling date after the directors and the bank filed their submissions.

Diamond Lalji and his brother Shayid want to be enjoined as interested parties in the case pitting the company against the bank.

In the suit, the firm wants the court to stop Standard Chartered from auctioning its land - Nakuru Municipality/Block 8/1 - after it defaulted on loan repayments.

The two had guaranteed the company Sh850 million of the Sh2.2 billion loan.

Milling Corporation used the property as security for the loan taken between 2010 and 2015.

The plaintiffs managed to repay Sh1,488,400,000 of the loan but defaulted on the balance of Sh755,921,143 that has remained unpaid since 2017.

For More of This and Other Stories, Grab Your Copy of the Standard Newspaper.  

Suffer damages

In a notice of motion dated July 8, 2019 the directors, through lawyer Sherman Njoroge, claimed they had a genuine stake in the proceedings and outcome of the case.

They said if they were not enjoined in the case they may suffer irreparable damages and auctioneers would be after them, being the guarantors of the loan.

They protested the move by the bank to auction the property the company used as security for the loan for Sh696,539,475, which is lower than the current market value.

“Although the property valuation by Mwaka Musau Consultants as at May 31, 2019 stands at Sh755,250,000, the defendant still insists on the 2018 valuation, which is breach of statutory duty towards the intended interested parties,” said the lawyer.

The bank, on the other hand, claims the application by the former directors is an abuse of court process and should be dismissed.

Do not miss out on the latest news. Join the Standard Digital Telegram channel HERE.

Get the latest summary of news in your email every morning. Subscribe below

* indicates required
Nakuru High CourtSh2.2 billion debtMilling Corporation of KenyaStandard Chartered Bank