Bank disowns Ongeri’s title deed in Sh20m loan dispute

Foreign Affairs Minister Prof. Sam Ongeri. Photo/BILLY MUTAI

What you need to know:

  • NBK says it has faced many hitches trying to sell plot to recover Sh136 million accrued debt

Foreign Affairs minister Sam Ongeri deposited a title deed for a parcel of land he did not own to secure a Sh20 million bank loan, a court was told on Wednesday.

The minister may be compelled to pay Sh136 million accrued from the bank loan if the suit lodged against him by the National Bank of Kenya succeeds at the High Court in Nairobi.

An official of the bank, Mr Paul Chelang’a, told the court that the bank had been trying to recover the money from the minister in vain.

He said Prof Ongeri received the loan in 1992 but did not “properly service it”, thereby attracting interest the bank now wants paid in full.

The accounts manager said the minister deposited a title deed of a controversial land parcel in Nairobi’s Dandora area as security but the bank had failed to sell the plot to recover the money as continual “rival legitimacy claims” plague the property.

“We are still pursuing the debt. We lodged the suit after failing to sell the property,” Mr Chelang’a said, noting that the latest hitch came when a litigation arose on claims that the land parcel was grabbed and allocated to senior politicians and businessmen.

“The true position is that we have the title but the property is not available. It has become difficult to sell. The documents looked okay until when we attempted to sell,” the witness said.

He testified that the bank discovered Prof Ongeri was not the registered owner of the plot as other people equally claimed the property.

He said the money demanded from the minister was a culmination of litigation cost, valuation bills and auctioneer overdrafts.

However, lawyer Joseph Wagara for Prof Ongeri challenged the evidence, saying it was the bank’s duty to conduct “due diligence” on the security beforehand.

Mr Wagara said the minister gave a clean title to secure his loan and that the bank had willingly failed to sell the property.

The lawyer revisited an earlier ruling in the case in which a judge determined that Prof Ongeri pays Sh33 million but the bank rejected it as “erroneous”.

The lawyer tabled correspondences to the effect that the minister had been making part payments since 1999 amounting to Sh33 million.

A letter read in court stated that the minister admitted struggling to pay back the loan.

Hearing resumes on March 13.