The Eldoret High Court has temporarily barred auctioneers from selling David Langat’s properties after the billionaire tycoon defaulted on a Sh2 billion loan from Stanbic Bank.
The court has issued an injunction barring the auctioneers assigned by Stanbic Bank from selling off Langat’s properties in Mombasa and Nandi counties to recover its huge debt.
According to court documents, Langat applied and received the loan from the bank in April 2020 at an interest rate of 9.25 per cent per annum which was to be repaid in 120 months.
He was to use the loan to reform his tea estate but defaulted and Stanbic, through Garam Investment auctioneers, announced the auction of the estate and properties in Mombasa.
A deal between the lender and Langat to sell off some of his assets in Tanzania to enable him pay Sh12.5 million per month flopped after they failed to secure potential buyers.
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The Kenyan bank then gave him the go-ahead to sell off the properties to the Tanzanian government but this too failed due to regulatory approval and budgetary allocation huddles.
A notice issued to the tycoon in January 2024 was resolved in six months after he paid Sh37.5 million to extend the deal, with a second auction notice issued after two months.
In his petition challenging the auction, Langat argued that the hurried sale of his Mombasa properties would lead to undervaluation hence hampering the fair resolution of the row.
His lawyers also demanded to inspect Stanbic’s proposed Sh12.5 million monthly repayment arguing that the figure was computed based on variations in interest that were illegitimate.
In their submissions in 2024, Stanbic Bank said the bank had acted in good faith by prolonging the repayment timelines and agreeing to talks to restructure the loan facility.
In issuing his injunction barring the auction of Langat’s properties, Justice Reuben Nyakundi indicated that he had considered the planned sale of the Tanzanian assets as a key factor.
“The premature sale of the charged properties could irreversibly prejudice these negotiations, creating a form of injury that transcends pure financial computation,” said Justice Nyakundi in his ruling on January 20, 2025.
He instead asked both parties to revisit their original pact and agree on a more convenient way to settle their dispute as he ordered for a fresh valuation of the properties in 45 days.
“While the defendants legitimately seek to recover their facility, their position is secured by charged properties.
“Conversely, an immediate sale could cause irreversible damage to the plaintiffs’ business operations and broader community interests.”
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