The HF Group (Housing Finance) has received the greenlight to proceed with the auctioning of a 63-acre land in Kajiado County.
The land which belongs to the Kampala International University (KIU) will be auctioned to recover a Sh. 3.1 debt the university owes the mortgage lender.
According to court documents, Kampala International University took the debt in 2014 to fund the construction of its campus in Kitengela then defaulted on the payments.
The university had aimed at setting up the campus at an estimated cost of USD15 million. The institution first approached Housing Finance in 2010. It was not until 2014 that the loan was approved. The university used the title deed for the land as security for the loan.
In the recovery of the debt, the amounts to be recovered will include USD13.8 million, including compounded interest of 9.5 per cent per annum from January 2018. This will push the debt to USD24.33 which is equivalent to Sh. 3.1 billion.
Kampala International University has been trying to block the auctioning of its land in Kitengela, Kajiado County, through the courts. Its latest effort at the Supreme Court had however failed, paving the way for the looming auctioning.
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In this effort, KIU had petitioned the Supreme Court to the lower Court of Appeal to allow for the auctioning of the land as unconstitutional. However, the Supreme Court in its dismissal of the petition declared that it had found nothing unconstitutional to warrant its involvement.
“This court has consistently held that the mere claim by a party to the effect that its rights were violated by a superior court for whatever reason, does not bring the intended appeal within the purview of Article 163 (4) (a) of the Constitution,” the Supreme Court stated.
In its battle to stop the auctioning, KIU had also alleged that Housing Finance was also at fault for delaying the release of some funds when the funding agreement was entered into.
The university argued that USD10 million was released by the mortgage financier in January 2014, but there was a delay in the disbursement of the balance of USD5 million.
KIU then sued Housing Finance seeking among others compensation for damages. However, Housing Finance filed a counter suit. In the end, the counter suit by the financier was upheld by an arbitrator, Collins Namachanja, who both parties had settled on, prompting the university on a series of court appeals.