COURT of Appeal has stopped Co-Operative Bank from auctioning a half-acre piece of land in Nairobi which is at the centre of a multimillion loan fraud pitting three banks against a man and his family.
Judges Philip Waki, Mohamed Warsame and Patrick Kiage ordered Co-Op Bank not to sell the land in the next three months pending the determination of an appeal filed by Equity and CBA banks.
The case is about how a family used the title deed of single piece of land to borrow a total of Shs 466 million from the three banks and then failed to repay.
The 3 leading banks in Kenya are now in legal dispute over who should auction the 0.2 hectare (half acre) parcel of land Dagoretti/Riruta/2289 to recover its money.
The Court of Appeal judges have described the issAue as an “intricate web of fraudulent syndicate hatched by the banks’ mutual customer”.
The fraud involves Patrick Kangethe and sons Edward Njuguna and George Kangethe, Patrick’s wife Margaret and Gladys Njeri Kangethe.
It all started on 8th April 2010 when Patrick, Edward and George, trading as Patrick Kangethe & Sons went to Co-Op Bank and borrowed Shs 166 million. They gave out as security the original title deed of the said piece of land registered under Patrick Kangethe on 29th September 1997.
Co-Op Bank duly registered legal charge over the title and retained possession of the title deed as security for the loan.
Interestingly, on 24th March 2013, Edward, George and Gladys went to CBA Bank and borrowed Shs 100 million using a title for the same piece of land but this time registered under the name of Wardpa Holdings Limited. Wardpa directors are Edward, George and Gladys.
As per procedure, CBA Bank conducted due diligence and eventually registered the legal charge against the Title on 23rd January 2014. The bank says it conducted appropriate searches and there was no previous charge on the Title. CBA retained the proffered original documents pending repayment of the loan.
On 23rd May 2014, yet another original Title for plot 2289 was obtained in the name of Kinjunje Gardens Limited whose directors are Patrick Kangethe and wife Margaret Wambui.
The couple then proceeded to Equity Bank on 9th December 2014 and borrowed Shs 200 million and a legal charge was registered against the title on 23rd January 2015.
Like CBA Bank, Equity Bank also says it carried out searches and found no evidence of previous encumbrances on the title deed. They also retain original documents.
All the three banks were oblivious of the fraud until 20th May 2016 when Co-)p Bank recalled the loan because of non-payment and instructed Leakey Auctioneers to advertise plot 2289 for sale to recover amount due which had now risen to Shs 195 million Patrick, Edward and George tried to block the salke by seeking an injuction in Mombasa High Court but failed.
When the auction was re-advertised, it came to the attention of CBA and Equity Banks that the security given to them was being sold.
Both CBA and Equity then filed different suits both asserting that the intention of CO-Op Bank to sell the property was illegal, null and void since they never gave consent for creation of any charge on the property besides theirs.
The trial judge J Okongo said he found no reason to stop Co-Op Bankfrom exercising its statutory power of sale and set it free to proceed with the auction.
He ruled that if any charges were created on fraudulent titles then those charges created by CBA and Equity Banks since the charge in favour of Co-Op Bank was first in time. Aggrieved by the ruling, CBA Bank moved to the Court of Appeal .
Meanwhile, Justices Waki, Warsame and Kiage said it was shocking the perpetrators of the fraud have not been criminally charged.
The corrupt lands offices played a major role in this fraud.
So does that mean equity na CBA watalilia kwa choo
:D:D:D:D:D:D
It’s hard to feel bad for them because of how they shaft us but woiye :D:D
They help the corrupt to hide their loot, the banks now have their comeuppance.
For a scam of this magnitude, either bank officials were bribed each time, or government officials at the lands office took bribes. Those are the only two possible leaks. The big question is, what does the land registry say about the land at the moment? Who owns it??
The banks should sue the lands ministry. The Kangethes will live to enjoy their loot. They can only get a few years behind bars for forging and deceit.
From today going forward never say the word in bold or people will put you in a category
If they are billionaires, they can hire decent lawyers from the right side of town to drag the court cases beyond their lifetimes, and then they will get thrown out for insufficient evidence. Hapa judges and lawyers ndio watanukisha kitunguu. Two banks wont get back their money, only the rightful owner will as per the current land records. Hao wengine watakauka.
A family of legends. Sio kwenda kuvunja milango ya banks na kutisha tellers na AK47
Good luck with that. I remember watu I think Syokimau walibomolewa nyumba juu ilikuwa land ya KAA. Wakaambiwa na Mumbi Ngugi ati they should have done due diligence before buying. They were left wondering kwani what is due diligence since walifanya search kwa Lands na wakapata haina shida, ati ni safi kama pamba.
I wouldn’t be surprised if a search was conducted today, only for them to find that the records were massaged overnight again and none of them owns the land, including the Kang’ethes. :D:D:D
Walijua hawajui, anyway bora uhai
This is Kenya .Swali ni mbona wamechelewa kufanya kuiba hio design . But that sum of cash cant be stored in sacks why not follow it .?
U can only sue the owner, but pia kuna lands officials, tricky sana situation
When banks get took by a sharp thinking customer this is what small people who have suffered from the ruthlessness of banks do
https://lp.vg/emoticons/smilielol.gifhttps://lp.vg/emoticons/smilielol.gifhttps://lp.vg/emoticons/smilielol.gifhttps://lp.vg/emoticons/smilielol.gif
ama they find out the land legally still belongs to the kang’ethes, and they can take out another loan on the same.
I was a victim of this Saga. The case is still in court.
Due diligence pia nikujua with fununu or whatever Ati it’s Kaa land na una ignore tu