Businessman Peter Munga has lost his bid to block auctioneers from selling off his multimillion shares over a Sh433.76 million ABC Bank loan. This is after the High Court dismissed the businessman and lashed at him for filing multiple applications in various courts in hope that one of the courts would issue orders favourable to him.
Justice Dorah Chepkowny ruled that the orders stopping the auction would not be extended in a ruling that was delivered at the High Court in Kiambu. The court ruled that Munga had approached the court without disclosing that he had filed a similar suit elsewhere.
“This conduct constitutes an abuse of court process warranting immediate intervention by the court, which is to set aside the ex-parte interim orders issued on February 3, 2025. The interim orders are set aside and discharged forthwith,” Justice Chepkwony ruled.
Munga had sought the orders after a ruling by High Court judge Alfred Mabeya gave he green light for the auction of 75 million shares that he holds at Britam Kenya over the debt that Munga had guaranteed one of his companies.
During the January ruling, the shares were valued at around Sh604 million. Currently, they are valued at around Sh510 million at a rate of around Sh6.8 per share. The shares will be auctioned by the ABC Bank over the loan that was advanced to Equatorial Nut Processors, a company that is owned by Munga.
Justice Mabeya had ruled that the loan taken by Munga’s company remains in default and as such there is no reason why ABC Bank should not attach the shares.
“In the absence of such payment, the court finds that the prayer for a permanent injunction [by Munga] preventing the first defendant [ABC Bank] and ABC Capital from realizing the security [of 75 million shares] is untenable and is disallowed,” the High Court ruled. “The court finds that the notice of motion dated 4/10/2024 lacks merit and is hereby dismissed with costs.”
In his application, the tycoon had told the court that he owned 75 million Britam Kenya shares. These shares were originally held with Genghis Capital before Munga later transferred them to ABC Capital.
The shares were then used as collateral for the multi-million that was taken by his company to fund a contract that the company had secured from the World Food Programme (WFP).
When payments for the loan failed to come through and the debt went into default, Munga received a demand letter on September 24, 2024 for the amount of Sh. 433,767,398.33 from ABC Bank. Munga contested this and claimed that he planned to use the shares to secure another loan.
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He claimed that the securities that were registered before his shares should be prioritized according to the doctrine of priority. He further claimed that the loan interests had surpassed the principal amount which was in violation of the principal of in-duplum.
The ABC Bank however countered these claims and told the court that multiple loan facilities had been extended to Munga’s company, with both Munga and the company signing the offer letter. The bank further said that Munga had signed a decree that he would repay the loan in the event of default.
