Former Cabinet Minister Raphael Tuju has addressed concerns about his Ksh 1.2 billion loan dispute, explaining that he borrowed the money for a project, not to buy property.
Speaking during a radio interview, Tuju clarified that banks do not grant loans solely to purchase property. He was given the money for the project.
“The loan was given based on a project proposal, which the bank evaluated. For that evaluation alone, I paid Ksh 4.7 million. Then they brought in an auditing firm to assess whether the project was viable, and I paid them Ksh 2 million,” he said.
Tuju has an ongoing legal battle with the East African Development Bank(EADB) over a disputed 27-acre piece of land in Karen.
He explained that after the audit firm confirmed the project was viable, the bank’s board approved a Ksh 1.2 billion loan.
“They approved Ksh 1.2 billion—Ksh 900 million was for buying the land, and Ksh 300 million was for developing the project. I also contributed Ksh 100 million from my own money,” he said.
However, he claimed that while the bank paid Ksh 900 million to the land seller, they refused to release the remaining Ksh 300 million meant for development.
“They paid the vendor Ksh 900 million and then refused to disburse the Ksh 300 million. That was a violation of the contract,” he added.
Tuju said the bank is now demanding repayment of the loan, even though he did not receive the full amount.
“I didn’t get the Ksh 300 million, yet they are still asking me to pay the loan. They are blackmailing me, and I refused to give in,” he said.
He also claimed that the case was initially rejected by the Supreme Court for being too complicated, forcing him to take it to a lower court.
“In the lower court, more evidence emerged, showing they had made several mistakes, which is why some judges had to step down from the case,” he said.
Tuju added that after the bank confirmed his project was viable, they gave him Ksh 500 million to continue.
“I paid Ksh 900 million to refund the money because it was disbursed in my name. But they refused to acknowledge the payment and now demand additional interest and legal fees totalling Ksh 1.5 billion,” he said.
According to Tuju, after he made the payment, the bank’s board reviewed the case and then increased the amount to Ksh 2 billion.
He also accused some board members of benefiting from loans from the same bank, and later having their loans written off.
“The problem is that I refused to comply with their blackmail. They even asked if they could get shares in my business after I had already taken the loan,” he added.
On July 24, an official from EADB, David Adongo, admitted that the bank did not release part of the loan meant for Tuju's Karen Villas project.
Adongo added that the second tranche of Ksh 294 million was intended for construction but was never disbursed.
