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Blunder Saved Citizen TV Billionaire Ksh 400 Million
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|Blunder Saved Citizen TV Billionaire Ksh 400 Million by Kenyans247(1): Mon 23, March, 2020 12:56pm|
Citizen TV owner SK Macharia has been spared paying millions in loan payments after a ruling rendered in his favour.
The ruling rendered by Justice Mary Kasango on March 11, 2020, granted SK Macharia a reprieve from paying Ksh 443 million to Export-Import Bank of America.
The contention raised by the bank before the court was that SK Macharia had defaulted a Ksh51.1 million loan he was granted in 1998.Initially, SK Macharia, through Roya Media Services had acquired the debt from Sentry Finance Corporation (SFC) and the Bank of America had only come in later when it offered to insure the loan should it go into default.
Royal Media subsequently used the money it received to purchase various television, radio and paging transmission equipment.
According to the court, Royal Media Services stopped servicing the debt in mid-1999 after paying Ksh 978,494.
This left the export-ImportBank of America with little recourse but to repay SFC itself as the insurer before subsequently demanding the millions it had spent from the Royal Media and SK Macharia as the owner.
However, Justice Mary Kasango dismissed the case clarifying that the suit had been filed 4 years too late and by that reason was ultimately time-barred.
This followed the requirement that cases of the nature that the Bank was bringing be heard within 6 years. The High Court subsequently highlighted that the bank should have filed in May 2006 and not, as it had done, in October 2010.
"Having reached the above conclusion, when then does the 6 years period begin to run. In respect to RMS the period will be calculated from 3rd April 2000. That is the date of the last letter, by RMS, confirming it was willing to pay the loan.
The 6 years in respect to RMS ran out on May 2006. In other words, the claim against RMS was time-barred in the year 2006. This case was filed on 15th October 2010. It follows that having been filed on that date that the claims against the principal debtor RMS and against the guarantors were statutorily time-barred when it was filed." read part fo the ruling.
Had the bank filed the suit within the court allocated time span, SK Macharia and his wife would have been on the hook for Ksh 453 million with a court interest of 12% factored in for the 2 decades that the loan had been in default.
If indeed I had found that this claim is not statute-barred I would have entered judgment for the admitted amount of $447,943.02 (Sh47.1 million) less the paid amount of $9,319.15 (Sh978, 495) plus interest.” provided the Justice Kasango in her ruling.
The misstep by the Export-Import bank not only cost it the suit but SK Macharia was saved from bearing the cost of the book.
"The last issue is who pays the costs of the suit. In my view, the costs, in this case, must follow the event. There is no reason why the costs should not follow the event, more particularly because Ex-Imp Bank slept on its rights and then brought this case after an unreasonable delay. Statute expects parties to be reasonably diligent in enforcing their rights before the court," concluded the ruling.
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