Former Cabinet Secretary without portfolio and ex Jubilee Secretary General Raphael Tuju is set to be auctioned over a bank loan of more than Sh. 2 billion.

This is after the Court of Appeal dismissed his bid to block the auction. In the auction, Tuju is expected to lose 20 acre land situated in Karen and valued at about Sh. 1.3 billion. He is also set to lose a multi-million hotel known as Dari.

The auction was initially set to take place in 2020 when the High Court gave the green light for his assets to be auctioned over the bank loan that at the time amounted to Sh. 1.5 billion by the East Africa Development Bank (EADB). This has  since ballooned  to Sh. 2.2 billion.

This loan had been advanced to his company, Dari Limited. Tuju had moved to the High Court after a United Kingdom court ruled in favour of EADB. Tuju and EADB had agreed that they would settle any dispute over the loan before an English court.

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According to court documents, Tuju’s Dari borrowed Sh. 900 million in 2015 to purchase a property known as Tree Lane in Nairobi. Tuju agreed to use titles of his expansive parcel in Karen as security.

According to EADB the debt, which it advanced on July 31, 2015, at $9.19 million (then Sh. 932.7 million), has remained in default since 2017 when it fell due.

The loans were for the construction of Sh. 100 million two-storey, flat-roofed bungalows sitting on a 20-acre forested land dubbed Entim Sidai and the purchase of a 94-year-old bungalow built by a Scottish missionary, Dr Albert Patterson, which currently operates as a high-end restaurant.

In the UK court, Tuju explained that there was a Phase Two of the project, which would involve raising additional financing. The court heard that it was understood the loan advanced to Dari would be paid through the second phase project.

But Justice Toledano found that the agreement between the parties did not say anything about a two-phase project.

In the case at the High Court and in the appeal at the Court of Appeal, Tuju had  argued that the ruling by the UK court deputy judge Daniel Toledano could not be enforced in Kenya, as he was not given a fair chance in the English court to challenge EADB’s claim. But the court dismissed this argument.

In the UK court, EABD argued that Dari defaulted on its obligation. The court heard that nothing was paid despite the demand.

“The claimant (EADB) commenced the action and seeks to recover by way of summary judgment the sums under the terms of facility agreement. As at the date of hearing, that sum is $15 million dollars (Sh. 1.5 billion),” EADB told UK court.

But Tuju told the UK court that EADB was holding titles of 27 acres of land as security. He said that if his firm Dari was put under receivership, its operations would be affected.

The UK judge ruled as follows: “I have been referred to the minutes of the board meetings which resolutions were passed approving the loan arrangements. There is no reference in those documents to the alleged representation concerning Phase Two.”

“Indeed, it was accepted by Defendant Two in his letter dated May 20, 2016 that the bank “remained silent” on the Phase Two lending. I, therefore, conclude that this head of defence does not provide any arguable basis for a defence either.”