Kenyan businessman Paul Ndung’u, a former chairman and shareholder of Pevans East Africa, the parent company of the well-known SportPesa betting brand, has lost a legal case attempting to halt the auction of his properties.
The case was brought against him by Equity Bank Kenya, the country’s top financial services group, over an outstanding Ksh664.8 million ($4.88 million) loan.
As a result of the court ruling, Equity Bank can now proceed with the sale of the assets used as collateral, marking a significant development in the ongoing dispute.
Ndung’u had taken out the loan in September 2019, securing it with an all-asset debenture and personal guarantees, to finance the expansion of his farming business and increase its export acreage. The Gigiri property and several farm plots were pledged as collateral.
Following the default by Ndung’u on his Ksh600-million ($4.41 million) loan, the debt had increased to Ksh664.8 million ($4.88 million) by March 13, prompting Equity Bank to order the sale of his assets when attempts at reaching an agreement proved unsuccessful.
Ndung’u was granted a 12-month moratorium on principal and interest repayments from May 18, 2020, but failed to meet his debt obligations after the moratorium period ended.
Earlier this year, Garam Investments Auctioneers, a reputable Kenyan auction house with over 28 years of experience in the retail industry, announced the sale of Ndung’u’s prime residential property, covering 2.8 acres in Nairobi’s Gigiri, as well as his 600-acre commercial farm in Laikipia County.
In reaction, Ndung’u approached the High Court to prevent the sale of his assets, arguing that they were worth more than the outstanding loan amount.
However, the court ruled in favor of Equity Bank, allowing it to proceed with the sale of the collateral.
In his ruling on April 20, Justice David Majanja stated that the Kenyan businessman had acknowledged their substantial debt, which was accruing interest, and that granting the injunction would exacerbate the debt’s growth and erode the security’s worth. This made it difficult for the bank to recover the debt without valuable security.
The judge dismissed Ndung’u’s application and ordered that the undisclosed funds deposited in court be released to Equity Bank and credited to the accounts of Ndung’u’s firms, Simba Fresh Produce Limited and Homes and Commercial Holdings Limited.
