Equity Group Holdings, a leading financial services group led by Kenyan banking magnate James Mwangi, and NCBA Group, a financial services conglomerate controlled by Kenya’s richest families, are embroiled in a legal battle over a Nairobi building that the two lenders claimed to have financed for Ksh160 million ($1.3 million) each.
According to a report by Business Daily, Equity Group on the property owned by Kinjunje Gardens Ltd claimed that the charge registered by NCBA for a loan borrowed in June 2014 was a forgery. NCBA has maintained that its charge is valid and that the one produced by Equity is illegal, and it has attempted to auction off the building in order to recover the loan.
Justice David Majanja of the Supreme Court of Kenya rejected Equity’s bid to halt NCBA’s auction of the property pending the outcome of the case, stating that it is difficult to conclude at this stage that Equity, which is asserting the validity of its documents and challenging NCBA’s, would not have exercised due diligence to investigate the entire transaction.
According to Majanja, the evidence presented in court shows that Kinjunje approached NCBA in June 2014 for a loan of Ksh160 million ($1.3 million) to purchase the property in Nairobi. The asset was charged to the bank, and Kinjunje failed to repay the loan, forcing NCBA to auction the property.
He also stated that the parties accused each other of fraud, forgery, and illegalities in relation to the title deeds and securities, but that all claims could be resolved after a full hearing.
Equity Group is the largest financial services conglomerate in East Africa, with subsidiaries in Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of the Congo, in addition to its extensive operations in Kenya.
Mwangi, who has been instrumental in the growth and transformation of Kenya’s financial services industry, owns a sizable 3.38-percent stake in Equity Group.
