Labour Cabinet Secretary Kazungu Kambi denies bank’s Sh300m claim

Labour Cabinet Secretary Kazungu Kambi.

BY WAHOME THUKU

Kenya: Labour Cabinet Secretary Kazungu Kambi has denied claims that he has been ordered to pay over Sh300 million to Development Bank of Kenya.

Mr Kambi, through his lawyer Philip Nyachoti, said the order issued by the High Court in June had been directed to his two business associates – Ezekiel Karisa and David Komen.

The order was issued by Justice Jonathan Havelock following an application for summary judgment by the bank in March this year.

The bank had in January 2007 advanced a loan of Sh60 million to their company Riva Oil Ltd which had been secured with its land in Kilifi Town and other assents.

It was advanced another Sh190 million in July same year.

The loan had been guaranteed by Mr Kambi, Mr Karisa and Mr Komen.

Loan balance

The bank’s credit officer Olga Sechero told the court that Riva Oil was suddenly closed down without notifying them, necessitating the demand for the loan balance from the guarantors.

In March, Development Bank filed the High Court application specifically against Karisa and Komen to have them compelled to pay the money, interest and all other charges.

The bank insisted that Karisa and Komen, both directors of Riva Oil Company, owed them more than Sh309,906,835 as at February 28, 2010 and the money had been accruing interest at the rate of 17 per cent per year.

Mr Sechero claimed that Mr Karisa actually acknowledged the debt and even agreed to have the Kilifi land sub-divided and his portion used to pay the loan.

He said that had not happened due to conditions on the title that bar the owners from sub-dividing the land.

The two directors filed a defence in April this year arguing that they were not the debtors but guarantors of the loan and that the bank had not tried to recover the money from the firm itself.

The court ruled that it was upon the two to pay up the loan and the interests to the bank and other agreed charges.