The High Court in Kiambu has set aside interim orders issued to billionaire businessman Peter Munga blocking his auction over a Sh433 million defaulted bank loan, clearing the sale of 75 million shares in insurer Britam.
Justice Dorah Chepkwony declined Mr Munga's request to extend orders restraining ABC Bank and ABC Capital from auctioning his Britam Kenya stake currently worth Sh510 million.
Mr Munga, better known for his role as founder of Equity Bank, has become a serial entrepreneur with a foothold in different sectors -- from agro-processing to insurance, education and industrials.
He has, in recent years, harvested hundreds of millions of shillings from the sale of Britam and Equity Bank shares.
The auction of his Britam shares marks the latest debt tussle for the billionaire investor, whose properties have previously been placed under auction.
Mr Munga had secured court orders on February 3, 2025 temporarily blocking the auction of the shares used as security for a loan facility advanced to Equatorial Nut Processors by ABC Bank to fund a World Food Programme contract.
"Having confirmed that the Plaintiff approached this court without disclosing that he had filed a similar suit seeking the same core reliefs before another court, this conduct constitutes an abuse of court process warranting immediate intervention by the court, which is to set aside the ex-parte interim orders issued on February 3, 2025. The interim orders are set aside and discharged forthwith," said Justice Chepkwony as she declined Mr Munga's request to extend the orders.
The businessman had filed suits in Kiambu and Nairobi courts seeking to overturn the auction bids.
Justice Chepkwony reckoned that Mr Munga's lawyers failed to disclose the existence of prior and parallel proceedings in Nairobi’s Milimani Law Court when seeking interim reliefs from her court.
"In this court’s view, a party cannot be allowed to go around the country filing similar cases in different courts, with the hope that maybe one of the courts will give him the orders he wants,” said the judge.
“This conduct amounts to forum shopping, which is a discredited litigation strategy, whereby a party deliberately initiates the proceedings in different judicial forms hoping to secure favourable outcomes or avoid adverse decisions.”
Mr Munga said he received a demand letter from ABC Bank for the payment of Sh433,767,398.33 after Equatorial Nut Processors defaulted on the loan repayment. The lender, in its letter, threatened to sell the businessman’s shares if the payment was not made.
Equatorial Nuts Processors is located a few kilometres from Maragua town and was established in 1994 to process macadamia nuts, peanuts and cashew nuts.
Official records show that Mr Munga has a 92 percent stake in Equatorial Nuts Processors and his business associate, James Karanja, owns eight percent.
The businessman, however, opposed the bank’s demand and maintained that he planned to use his shares to secure another loan.
He argued that the demand letter violated the in-duplum rule, which provides that loan interests should not surpass the principal amount. ABC Bank and ABC Capital, however, opposed Mr Munga’s application, saying it would “distort the terms of the loan facility”.
Through an affidavit filed by its senior legal manager, Faith Nteere, ABC Bank said that it provided multiple loan facilities to Equatorial Nut Processors, with both Mr Munga and the nut processing firm signing the offer letter.
She further said that the businessman, in his capacity as a director of Equatorial Nut Processors, signed a personal guarantee and indemnity in favour of ABC Bank, agreeing to repay the loan in the event of default.
Mr Munga directly owns 75 million shares in Britam and has significant ownership in two investment vehicles—EH Venture Capital and EHL 2022—that have a combined 405 million shares worth Sh2.75 billion.
In 2023, three properties linked to Mr Munga were set to be auctioned to recover their unpaid dues.
Mr Munga in October 2017 averted the auction of his five houses in Nairobi’s Kasarani worth Sh400 million at the time after making a last-minute payment to Jamii Bora Bank, now trading as Kingdom Bank.
