Stanbic, Modern Coast to settle Sh485m loan row out of court
Modern Coast and Mr Butt are seeking a declaration that the bank cannot sell their properties without complying with Sections 90 and 96 of the Land Act.
Stanbic Bank Kenya and Modern Coast Coaches Ltd have moved to settle a Sh485 million loan dispute out of court.
Through its lawyer, the bank told the court that it reached out to the regional public service buses company to propose a settlement considering that the company was seeking to restructure the loan.
The bank then withdrew its application seeking a temporary injunction stopping it from selling the firm's properties set aside, while Modern Coast and its director Haroon Shahid Butt's preliminary objection against the application was marked as spent.
Modern Coast and its director through their lawyer told the court that they are optimistic of recording a consent.
In the case, the transport operator had accused the bank of advertising its business yard and Mr Butt's matrimonial home for sale by public auction without giving them an opportunity to restructure and continue servicing the loan.
The High Court granted the director, who is the son of slain Mombasa tycoon Shahid Pervez Butt, and Modern Coast an injunction against the sale of the properties pending hearing and determination of their application for conservatory orders.
Modern Coast and Mr Butt want in their application to be allowed to settle the loan through a monthly payment of Sh2.2 million pending hearing and determination of the case.
According to the plaintiffs, sometime in 2016, the bus company took out various loans with the bank totaling to Sh485 million and has over the years continued to settle the loan having paid the bank Sh344 million.
“The plaintiffs state that owing to the prevailing harsh economic times, they have from time to time engaged the bank in discussions with a view to restricting the outstanding loan facilities to enable them service the loan without serious hardships,” they say.
They also want an order issued compelling the bank to restructure Modern Coast loans and allow them to repay within the agreed period.
Modern Coast and Mr Butt are seeking a declaration that the bank cannot sell their properties without complying with Sections 90 and 96 of the Land Act.
The two also want a permanent injunction issued restraining the bank or its agents from advertising, selling and in whatsoever dealing with the properties.
According to the plaintiffs, other than the advertisement proposing to dispose of the charged property by way of public auction, they have not received any other notices from the bank.
They argue that under the proposed restructured loan agreement, the plaintiff still has sufficient time to repay the loan and the bank should not be allowed to take advantage of its current business status to punish them by disposing of all properties charged to it.
“The defendants above illegal, unfair and unprocedural actions if allowed to proceed would completely damage the plaintiffs’ business which they have carried out for many years. It will subject them to loss of their valuable property and their only income,” part of the case documents state.
Justice Jairus Ngaah directed the case to be mentioned on February 10 when parties are expected to record a consent.
