Tuju's Karen Properties Face Auction Amid Sh2.2 Billion Loan Dispute

The former Cabinet Secretary Raphael Tuju's two properties in Karen, Nairobi, a restaurant and a wellness sanctuary, are set to be auctioned off on October 1.

Auctioneers recently advertised the sale of Dari Coffee and Garden restaurant and Entim Sidai wellness sanctuary, both located in the upscale Karen neighbourhood of Nairobi. The auction, scheduled for October 1, requires interested bidders to place a mandatory deposit of Sh10 million for each property. This development is the latest chapter in a protracted legal dispute between Tuju and the East Africa Development Bank (EADB) over a contested Sh2.2 billion loan. The conflict stems from a 2015 facility agreement in which EADB agreed to provide Tuju with a $9.3 million loan to fund the acquisition and development of commercial properties in Nairobi.

However, Tuju contends that the bank failed to honour the entire agreement, alleging that a balance of Sh294 million was never disbursed. Tuju has vehemently criticized the bank's decision to auction his assets, describing it as malicious and intended to humiliate and intimidate him. He expresses bewilderment at the timing of the auction advertisement, given that a court ruling on the case's intricacies is expected on September 18. Tuju suggests that the move might be motivated by the potential for legal fees and auctioneers' charges. The legal battle between Tuju and EADB has been complex, involving multiple court cases and appeals.

At the heart of the dispute are disagreements over the loan agreement's terms and the bank's alleged failure to fully disburse the agreed-upon amount. Tuju has argued that the bank's actions have caused him significant financial strain and reputational damage. In a recent development, Justice Alfred Mabeya issued a directive for the parties to maintain the status quo, effectively putting the bank's efforts to auction the property on hold. The judge acknowledged the lender's right to recover its money but emphasized the need to consider the borrower's readiness to pay, calling for a thorough examination of these issues.

The case has attracted considerable attention due to Tuju's high-profile status and the prime location of the properties in question. Dari Coffee and Garden restaurant and Entim Sidai Wellness Sanctuary are well-known establishments in Karen. The properties are valued for their strategic location and commercial development potential.