Defaulting politicians are becoming a headache for banks.
Their mix of political power, wealth and influence is every banks nightmare when enforcing a contract .
Regional lender East Africa Development Bank (EADB) is getting a full view of how murky this can get in Kenya.
Armed with a favourable ruling from a UK court to enforce a demand of Sh1.6 billion from Jubilee Secretary General Raphael Tuju, the bank has come against typical delay tactics and sometimes impunity from the politician.
Mr Tuju and his children Yma, Mano and Alma have recently been cited in court for blocking reciver managers from taking over Dari limited which was listed as a security for the loan.
After winning in the UK Court, EADB secured a ruling in Kenya on March 25 directing the Tujus to hand to the receivers the company’s statement of affairs, management accounts, list of debtors and creditors, financial returns and records as well as cash book from December 29, 2019.
However, their attempts to access the premises were repulsed by police officers manning the premises.
This is not the first time the politician has blocked execution of High Court orders.
Mr Tuju has previously been cited for contempt for blocking access to Dari restaurant in Karen, claiming his company Dari Ltd was denied the right to be heard before the order that allowed receiver managers George Weru and Muniu Thoithi access to the prime property under receivership.
EADB Senior Counsel Fred Ojiambo said the receiver managers were denied access to the company on several occasions.
Dari Ltd was placed under receivership in January this year over a 2015 debt owed to EADB, after it failed to pay “instalments of interest” and that by the second quarter of 2016, the loan was substantially in default.
The company owns the high-end Dari Restaurant in Nairobi’s Karen area and a 20-acre recreational resort dubbed Entim Sidai.
Mr Tuju has appealed the decision depositing Sh50 million as directed by the appellate court, as a condition from stopping the bank from auctioning his property.
Politically exposed clients have always posed a problem for lenders given their ability to influence operations of businesses within countries and enforcement of court decisions.
However, many corporates are following the Tuju case closely since enforcement of a contract is key for foreign investor confidence in any market especially in developing nations which need to attract foreign investments.