Equity’s Sh650m dispute with State contractor deepens

Customers at an Equity bank lobby. PHOTO | PHOEBE OKALL | FILE  NATION MEDIA GROUP

By GALGALLO FAYO
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A construction company involved in a protracted court case with Equity Bank over a Sh650 million loan has filed a fresh application seeking to stop the lender from demanding the cash.

Two directors of Capital Construction Limited, a government contractor, say that Equity Bank acquired a default judgment requiring them to pay Sh650 million plus interest erroneously. They argue that they were not served with summons.

 

The court dispute first arose in 2009, when the company accused Equity of attempting to appoint receivers to take over the firm while it allegedly had not defaulted on repaying the loan.

The case took another turn last year March, when the High Court directed three of the firm’s directors to pay Equity Sh650 million plus 24 per cent annual interest from July 2010, until payment in full.

The default judgment was entered after the contractor failed to appear in court to defend the counter claim.

“Pending the hearing and determination of this suit there be an order to stay execution of the decree issued on March 20, 2013 and all said consequential orders thereto,” reads an order sought by three directors of the construction firm.

This story first appeared in the Business Daily.