Dari Limited, owned by former Cabinet Secretary Raphael Tuju, has lost control of its assets, including the Dari Restaurant in Karen, Nairobi, to joint receivers Muniu Thoithi and George Weru of consultancy firm PriceWaterhouseCoopers Limited.
This is in a bid to recover a KES 2.22bn ($16.5m) loan that the company owes the East African Development Bank (EADB). This loan was secured by Dari’s 20 acres of land, Tuju’s seven-acre property and his residential home on Mwitu Road, which the bank intended to sell to recover its funds.
The loan was granted in 2015 to upgrade the restaurant and establish a gated community project known as the Karen Retirement Home on the Tree Lane property. The plan included the development of 30 three-bedroom homes, a spa and commercial units for sale in Nairobi.Â
Tuju is contesting the loan and claims the bank declined to finance the construction of residential units after it asked for additional security in the form of another property in Upper Hill that had already been charged to the Bank of Africa. The disagreement over funding led to Dari’s inability to service the loan as agreed.
In November 2018, EADB filed a claim in the High Court of Justice Business and Property Courts of England and Wales, Queens Bench Division Commercial Court Royal Courts of Justice. Judge Daniel Toledano ruled that EADB was under no obligation to lend KES 294m ($2.19m) that was meant to finance the renovation of the Tree Lane property’s hospitality facilities.
Judge Toledano ordered Tuju and Dari Ltd to pay EADB KES 15,162,320 ($113,012) under the facility agreement, as well as the interest on this amount, which was to be calculated from June 20, 2019, along with the bank’s costs of the proceedings. Tuju and Dari were to make an interim payment of GBP 100,000 ($139,500) within 28 days of the judgment.
The receivership came after the Court of Appeal dismissed Tuju’s bid to block EADB from enforcing the UK court’s judgment in 2019. The move also followed a notice from EADB that the bank intended to auction Dari’s assets to recover its funds as the loan agreement was signed before the enactment of the Insolvency Act, which would have offered some protection to Dari from the auction. Under the act, a creditor is expected to rescue an indebted company ahead of auctioning its assets, offering a lifeline to the debtor.
