Bank lock horns with a client over collateral

A man has filed a complaint with the Central Bank of Kenya’s  (CBK) bank supervision department over a property dispute with Paramount Bank

In a letter seen by Standard Digital, Central Bank of Kenya (CBK) through its bank supervision department has written to the lender to appraise it on the matter involving a land dispute with Zaverchand Ramji Shah in regards to a parcel L.R NO 209/6/13.

“This is to acknowledge that the Central Bank of Kenya received your complaint and wrote to PBL to appraise us on the matter, we shall revert comprehensively once we obtain a repose from the bank,” read a letter written by CBK’s Daniel Muguima to Zaverchand Ramji Shah through his lawyer Mr. Osundwa Sakwa.

A letter written to CBK mid-October by the client’s lawyer states that the property is in a prime area of Nairobi City County easily fetching in excess of Sh400 million in the current market.

“The brief facts informing our instructions herein are that in the ordinary course of business our client took facilities from the bank for which he leveraged the property as a security,” states Osundwa and Co Advocates in a letter to CBK Bank Supervision department.

The bank alleges that our client defaulted on the facilities and consequently that the bank had no option but to dispose of the property to indemnify themselves,” he says alleging that the requisite statutory procedure for the exercise of such power by a bank was not followed and as a consequence Shah was disposed of his prized asset under unclear circumstances.

There has been a protracted court battle between Shah and the bank over the land.

Later, a court ruled that he should deposit sh25 million with the bank to secure his land which he had used as collateral.

Zaverchand said he deposited the cash with Paramount Bank, but Paramount ignored him and purportedly engaged an auctioneer to auction the land.

He said in the letter that Garam Auctioneers denied ever auctioning the land.

However, in a strange twist, in an affidavit sworn by one of the Banks directors Ayaz Merali on 24th July 2020, he admitted that Zaverchand deposited Sh25 million to the Bank as loan payment.

The Bank transferred the land to KURWA limited.

KURWA limited is associated with former Limuru MP Kuria Kanyingi.

He said Kanyingi’s two wives Jerioth Wangui and Susan Wangu denied being involved in the land saga.

A search at the registrar of Companies on 29th October 2013 indicated that the registered directors of KURWA limited were Simon Kuria Kanyingi, and Jerioth Wangui Kanyingi.

On 22nd Apri2008, Zaverchands land was transferred to KURWA limited and to Karim Kanani.

No cash was exchanged.

NLC has also said the transfer was illegal.

The transfer documents were signed by advocate Mercy Kamau who is also a director at Paramount Bank.

Zaverchand wants the Central Bank to act against the Bank. He pleaded with the Bank and the other agencies to help him get back his land.