Firm fights National bank’s bid to sell its assets over Sh1.3B debt

General Mills East Africa has accused National Bank of Kenya (NBK) of foul play in an attempt to auction its assets, arguing that the lender did not disclose its plans to sell its property during negotiations to settle outstanding debts.

The maize and wheat trading company claims that during a meeting with the bank’s top officials, the lender had agreed to collaborate to find a solution that would see loans in excess of Sh1.3billion the firm had taken to put up a milling plant in Mariakani was repaid in due time.

“It is hereby ordered that this application be and is hereby certified as urgent…that an injunction restraining the Defendant (National Bank of Kenya), by themselves, servants, auctioneers, receivers, agents, advocates or any of them or otherwise from offering the sale or purporting to sell by public auction, or private treaty or in any other way alienating the 1^st and 2^nd Plaintiffs property and or parcels of land..” reads in part an affidavit filed in a the high court of Mombasa.

The case filed on 15^th November this year pitting General Mills East Africa limited through its proprietor Ben Gitonga Muiruri Mungai as the litigants and National Bank of Kenya limited listed as the defendant is to be heard before Justice P.J.O Otieno.

The assets in question are land parcels in Mombasa, Kilifi and Lamu counties valued at hundreds-of-millions of shillings which the struggling bank had targeted for auction.

National Bank of Kenya has been in the news over its recently launched controversial debt recovery scheme christened ‘write-offs’, a planned move believed to be benefiting a few individuals within the bank.

The lender is presently choked by huge burden estimated at Sh30.1billion in non-performing loans (NPLs) part of which it may be forced to write-off for non-recovery.

The bank is engaging its clients directly to reach a gentleman’s agreement –a move believed some top officials in the bank are using to get kickbacks from its corporate clients with huge debts, with assurances to ‘clear-off’ outstanding loans owed to the bank. www.extremepitasurvey.com

The bank has unceasingly denied such allegations.

The revelation was made recently during summon made to the bank’s management that had appeared before the National Assembly Finance Committee chaired by Joseph Limo which had requested for detailed information on the ‘write-offs’ scheme.