A businessman has sought court protection against Chase Bank receiver’s move to auction his property over Sh643 million loan arrears.
George Towey and three companies associated with him have accused the Kenya Deposit Insurance Corporation (KDIC), the receiver of collapsed Chase Bank, of exaggerating the accrued interest, arguing that he owes the lender less than half of what is claimed.
Chase Bank was placed under receivership in 2016.
Last week, SBM completed the acquisition of carved out assets and liabilities of the lender through its subsidiary SBM Kenya.
“The bank is claiming to recover over Sh643 million, which is a figure that the plaintiff avers is out of this world because he has been duly repaying the principal down to less than Sh210,327,242 with arrears for Sh174,170,536 as at June 30, 2018, yet the bank is claiming over Sh643 million,” he says in court papers.
Mr Towey, Netsol Kenya Limited, Netsol Engineering and Brookside Hill are listed as plaintiffs.
They have sued Chase Bank, the KDIC, Garam Investment Auctioneers and Central Bank of Kenya.
Recruited in 2015
US tech giant Apple recruited Netsol Kenya in 2015 to sell its products including its flagship iPhone, iPads, Macs and other accessories in the local market.
The electronics distributor then set up a Sh15 million store at the Lavington Mall that has since moved to the Lavington Curve Mall in Nairobi.
The plaintiffs have asked the High Court to protect them from respondents’ move to auction their properties.
Auctioneers had advertised the property in Parklands for sale, prompting Netsol Kenya to seek court intervention.
The businessman argues that Chase Bank breached the terms of the loan after it was placed under receivership, making it difficult to service the facility.
He further claims no notice of default or intention to sell was issued to him prior to advertising for auction.
The businessman claims agents representing the CBK and the KDIC repossessed all his vehicles and listed him with credit reference bureaus making it impossible for him to access loans from other financial institutions.
He said failure by Chase Bank to disburse the entire loan amount of nearly Sh700 million jeopardised his chance to undertake a lucrative contract he had with Safaricom.
SBM Holdings, which has now taken over the Chase Bank business through its subsidiary SBM Kenya, said depositors would have access to 50 per cent of the funds transferred to SBM Kenya through savings and current accounts.
The remaining 50 per cent of the transferred moratorium deposits would be available equally over the next three years and will earn an interest during this period.