The NCBA Bank has sued the proprietors of international school Hillcrest and Gems over a Sh. 1.6 billion loan. The bank says that the international school has not been paying the loan as had been agreed.
The lender has sued Hill Holdings Limited, Hillcrest Investments Limited, and Gems National Academy Limited which trades as Regis School in Runda, Gems Holdings Africa Limited, Gems Global Schools Limited, Varkey Group Limited, Gems Africa Limited and Ernestem Holding Limited.
In the case that has been filed at the commercial court in Nairobi, the NCBA has said that the property used to secure the loan cannot cover the amount of money loaned if it is auctioned.
NCBA has also told the court that Hillcrest’s parent company which is known as Varkey is incorporated in the British Virgin Islands.
According to the NCBA, the Hillcrest and Gems has failed to service the loan. The loan was Sh. 1.36 billion and now has grown to Sh. 1.65 billion. This loan had been advanced through Hill Holdings Limited.
It had been guaranteed by Gems Holdings Africa, Gems Global and Varkey. GEMS Holding was incorporated in the United Arab Emirates while Gems Global is incorporated in the Cayman Islands. Hillcrest Investments agreed to be an additional guarantor for a sum not exceeding Sh. 160 million.
“The first defendant (Hill Holding) has since defaulted in payment of the amount advanced under the advanced facility,” said NCBA in its court papers.
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“The debt owed by the defendants is not disputed and the plaintiff is likely to succeed in this suit.”
NCBA further added that on October 15, 2021, Gem National and Gem Africa struck a share transfer deal with Ernestem Holding. This deal was against their agreement on the loan.
As a result of this, the bank has asked the court to ban the owners of Hillcrest from selling their shares in any of their companies.
The bank has also asked the court to have Gems Africa, Gems National and Ernestem Holding lift their veil for investigations on the transfer of 700 shares.
“The actions of the defendants have affected the plaintiff’s operations as the money issued to the defendants belongs to the bank’s depositors and not the bank. Additionally, the bank continues to suffer loss,” NCBA’s legal officer Stephen Atenya told the court.
