KPCU title deeds missing in Sh700m dispute with bank

KPCU headquarters in Nairobi. FILE

By Galgalo Fayo,


IN SUMMARY
KPCU claims the title deeds were lost while under the custody of the Kenya Commercial Bank (KCB), and its appointed receiver (Harveen Gadhoke), who was in charge of the union’s affairs for four years.
The revelation is contained in court documents in which the KPCU board is challenging KCB’s decision to renege on a December 3 out- of -court settlement that lifted the union from receivership.
The High Court on Friday restrained KCB and the new receivers from taking over KPCU, pending the hearing of the suit on January 27.


Deeds of ownership for properties worth more than Sh2 billion owned by the Kenya Planters’ Co-operative Union (KPCU) cannot be traced, putting the investment of 700,000 coffee farmers countrywide at risk.

KPCU claims the title deeds were lost while under the custody of the Kenya Commercial Bank (KCB), and its appointed receiver (Harveen Gadhoke), who was in charge of the union’s affairs for four years.

The revelation is contained in court documents in which the KPCU board is challenging KCB’s decision to renege on a December 3 out- of -court settlement that lifted the union from receivership.

“After cessation of receivership did the petitioner discover that the 1st (Kenya Commercial Bank) and 3rd respondents had misplaced lost and or hidden all its original titles, whose value is in excess of Sh2 billion,” KPCU board chairperson William Gatei says in court documents.

The High Court on Friday restrained KCB and the new receivers from taking over KPCU, pending the hearing of the suit on January 27.

“Pending hearing and determination of this application inter parties, a conservatory order is hereby issued maintaining status quo as at December 31 prior to purported appointment of the receiver managers of January 9, 2014,” ruled Justice Weldon Korir.

The coffee miller has been under receivership since October 2009. The attachment was lifted on December 3 after the board reached an agreement with KCB, which it owed Sh700 million.

READ: KPCU lost Sh727m to receivers, say former directors

Under the agreement, the union was to pay Sh100 million to KCB within 30 days, but this did not materialise after the board could not trace the titles in order to secure the money from a financier.

The board went to KCB demanding the titles, but the bank said the deeds were not in its custody, prompting it to place the miller under receivership again on January 9, this year.

“We were surprised and astonished when on January 9, the 1st respondents appointed 2nd to 4th respondents as receiver managers,” says Mr Gatei.

The three receivers listed as 2nd to 4th respondents are Deloitte Consulting Limited, Mr Gadhoke and Samuel Onyango.

KPCU was placed in receivership over a Sh644 million debt, but the former board of directors went to court to dispute the decision.

In November last year, the board and KCB agreed on the modalities of repaying the more than Sh700 million debt, leading to the lifting of the receivership.

Mr Gatei says KPCU had negotiated a loan of Sh100 million with a bank who was withholding disbursement, pending the charging of titles.