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Court saves K’Osewe from auction in Sh330m debt dispute
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|Court saves K’Osewe from auction in Sh330m debt dispute by Kenyans247(1): Thu 18, February, 2021 12:34pm|
he auction of the stalled four-star Bluewater Hotel in Kisumu belonging to the family of businessman William Osewe Guda has been put on hold on condition that they deposit Sh25 million in court within 45 days.
A bench of three Court of Appeal judges also stopped Guaranty Trust Bank (GT Bank) from auctioning an apartment in Nairobi’s South C belonging to Mr Osewe, who is associated with the popular Ronalo or K’Osewe eateries in Nairobi and Kisumu.
The Osewes owe Guaranty Trust Bank more than Sh330 million, secured using the Kisumu hotel and the block of apartments in Nairobi’s South C.
The bank has been trying to auction the property since 2018 amid multiple suits before the High Court judge Thripsisa Cherere cleared the forced sale in January.
But Justices Hannah Okwengu, Patrick Kiage and Jamila Mohammed reckon that the family has valid reasons challenging the High Court judgment.
“We have considered the application and concluded that the grounds raised by the applicants are arguable and cannot be said to be frivolous such as to be dismissed as insubstantial,” ruled the three judges.
“Their properties are in danger of being sold and if this application is not granted they stand to suffer a colossal loss if transferred to third parties due to the value involved, and the appeal would be rendered nugatory.”
Mr Osewe and his wife rushed to the appellate court arguing that they had continued to service their loan despite disruptions resulting from the Covid-19 pandemic.
The lender had opposed the appeal, maintaining that the debt was not disputed and stopping the planned auction would amount to a serious, grave and fundamental interference with its right to recover the unpaid loan.
“We hereby now grant the injunction and stay of proceedings sought in the motion and order that once the condition imposed by this Court on 17th December 2020 is satisfied, such injunction and stay shall extend to the hearing and determination of the appeal,” the judges said.
Mr Osewe is the latest prominent personality to have fallen on hard times as they battle auctioneers over unpaid bank loans.
They are struggling to hold onto their prime assets over mounting bank loans as Kenya’s economy slows down and repossessions pick up.
The Osewes argued that their property was valued at four times the loan.
They added that the Kisumu hotel is on a prime beachfront and would be difficult to replace if the auction goes on. Adverse action on the Kisumu property, they said, would spell doom to their franchising deal with Marriott and Aleph.
Guaranty Trust Bank, however, insisted that the Osewes had defaulted on their loan and that they were only buying time with another court order barring the auction.
The bank said it was not a party to the franchising agreements.
Bluewaters had signed franchising deals with Dubai’s Aleph Hospitality and American giant Marriott International. It was expected to join the prestigious league of Protea Hotels by Marriott in 2022.
Mr Osewe, who has grown into one of the pillars of Nairobi’s food culture, owing to his Ranalo Foods or K’Osewe, has gone through turbulent times in the past three years.
On July 30, Bensure Auctioneers sold hundreds of items at Ranalo Foods Upper Hill, marking the end to the branch.
Shortly after opening the Ranalo Foods branch in Kisumu last year, it emerged that the restaurant was on Kenya Railways land. It was demolished but later reopened at another location.
In 2018, Mr Osewe escaped death narrowly when his friend Tom Oywa Mboya shot him three times.
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