Raphael Tuju Risks Bankruptcy Case over 1.6 Billion Loan

East African Development Bank (EABD) threatens to file a bankruptcy case against Jubilee Secretary-General Raphael Tuju should he not pay a multi-million-dollar loan that he owes the bank.

The bank is now targeting the children of Mr. Tuju to recover the $16.5 million, which is way overdue, (Sh1.6 billion) since they had guaranteed their father’s loan.

The Tujus who were served earlier by a notice of payment of the bank’s loan and failure to pay the bank will file a bankruptcy case against them.

“You shall pay EADB…as payment of the principal and interest payable as at 20th December pursuant to a guarantee and indemnity dates 10th April 2015…Further take notice that failure to the pay the afore-stated amount shall result in EADB filing for bankruptcy against your estate.” noted a demand notice sent to Mano Tuju and attached in court documents.

The case which had been heard in a court by deputy judge of the High Court Mr Daniel Toledano, QC on June 19, 2019 has received a backing by the Kenyan High Court which enforced that the property under Dari Limited should be seized for sale.

The loans which were meant to facilitate the construction of a Sh100 million project dubbed Entim Sidai, which will include a two storey flat-roofed bungalows that will sit on a 20-acre forested land, and also the purchase of a 94-year-old bungalow built by a Scottish missionary which currently operates as a high-end restaurant.

Tuju’s children Yma Tuju, Mano Tuju and Alma Tuju have further blamed EADB for the delay in construction of the 12 luxurious  Karen homes after the lender declined to provide additional millions for building the luxury houses in breach of the loan agreement, they also said that EADB had disbursed Sh932.7 million instead of the agreed Sh943.9 million.

“EADB is fully aware that in the absence of the development of the housing units for sale as envisaged in the project proposal, Dari would not be able to service the loan facility,” Mr. Tuju.

The Tujus have also accused the bank of being unjust to them saying that the principal debtor, Dari Ltd was able to repay the debt.

They added that the demand notice is incompetent and does not disclose the fact that the EADB holds security against the Sh1.6 billion loan.

According to the Tujus, the valuation of the property back in 2015 indicated that the property had a combined market value of 1.84 billion which is in excess of the amount being demand.

EADB’s side on the contrary said that the guarantee is not disputed and the liability from the defaulted loan had already crystalized and further added that they do not hold any security over the principal debtor Dari Ltd.

This comes as a second blow to the Tuju family as Raphael Tuju is in the hospital in London after he was injured in a road accident while heading for the burial of the former president of Kenya, Mr Daniel Torotich Arap Moi.