A group of university staff are battling to stop a local bank from selling a multi-million shilling parcel of land in Kibos, Kisumu County, over a Sh20 million loan.
In a case before the High Court in Eldoret, Sidian Bank has engaged auctioneers to recover Sh20 million, which it claims was advanced to Kisony Welfare Group in 2013, with the 52-acre parcel as security.
According to court documents, more than 30 university staff birthed an ambitious plan between 2010 and 2012 to purchase land where they would build retirement homes.
However, the group faced financial hurdle as they couldn’t raise Sh10 million to purchase the 52 acres.
The group then engaged Sidian Bank in 2012 and it advanced the Sh10 million to secure the land.
After securing the land, interested members purchased the property and allowed the group to clear the loan.
In a twist of events, three people who were entrusted as directors of the welfare group allegedly obtained a Sh20 million loan in 2013 without the approval of the welfare members.
Early this year, the bank moved to auction the land, catching the owners who had since built retirement homes on the parcel off guard.
This has turned into a court battle pitting 32 professors, teaching and non-teaching staff on one hand and junior university staff, including a security guard and a lab technician, on the other.
The dons are claiming the junior staffers went behind their backs and fraudulently borrowed the loan.
In an affidavit dated August 26, 2020, Bernard Rombo, one of the beneficiaries, said he is currently residing on the parcel after paying Sh360,000 for an acre.
The landowners secured a temporary injunction on September 2, prohibiting the bank from auctioning the property after two different valuation reports of the land emerged.
A valuation report ordered by the bank placed the land’s market value at Sh30 million, but another one ordered by the buyers valued it at Sh130 million.
The High Court was also told that Sidian Bank’s valuation report indicated that none of the buyers was living on the land.
However, in sworn affidavits, at least four buyers had told the court that they had built houses on the land and were already living in them.
Justice Olga Sewe ordered the bank and Keysan Auctioneers not to alienate, sell or appoint a receiver pending further direction by the court.
Sidian told the court that it did due diligence and was satisfied that no illegality would arise in using the property to secure the loan, arguing that the land in question was registered under Kisony Welfare Group Limited.
“Kisony Welfare Group Limited directors (the accused) provided the bank with all the requisite resolutions to support each of the borrowings and executed all the loan agreements and charge documents as required,” the bank said.