Jubilee Secretary General, Raphael Tuju might be in big trouble if a London-based court forces a hotel linked to him to pay a Ksh1.4 billion loan that Tuju guaranteed in July 2015.
According to court documents seen by the Business Daily, Tuju and a firm known as S.A.M Company Ltd signed a deal in which they promised to guarantee the payment of the loan on a full indemnity basis.
Speaking to kenyans.co.ke, Lawyer Apollo Mboya revealed that in such a circumstance as in this case, one could be forced to take up the full responsibility of repaying the loan if the hotel defaults.
The East African Development Bank (EADB) filed the case before the London court seeking to have the Karen-based establishment compelled to offset the Ksh1.4 billion loan whose repayment became overdue in 2017.
The Queen’s Bench Division of the High Court of Justice of England and Wales arrived at a decision meant to enforce the payment of the overdue debt including auctioning the hotel and its assets to offset the loan.
However, the hotel where Tuju is a director filed a petition against the court's decision.
Court documents, as reported by Business Daily, reveal that the restaurant entered into an agreement with the bank in April 2015 where it was loaned Ksh962 million. The documents show that the hotel had agreed to repay the loan in 20 consecutive installments.
In the deal, the Tuju-linked restaurant was awarded a 2-year grace period that elapsed in 2017.
The bank reported that the restaurant failed to pay Ksh186 million in interest owed and ignored the notice given to it on clearing the debt.
The bank also accused three other guarantors of failure to ensure the restaurant complies with its financial obligations.
When Kenyans.co.ke, reached Tuju for a comment, the former Rarieda MP confirmed that indeed he was enjoined in the lawsuit but claimed the bank failed to offer the full amount they had sought.
"It is true there is a lawsuit. We have a hotel project of about Ksh4.5 billion and when the bank [EADB] couldn't finance the rest of the money, we tried to pull out only to disagree on the interest rates," he stated
