The court has rejected a request by former Thika Town MP Patrick Wainaina to reverse the auction of one of his cashew nut processing machines over an outstanding debt of Sh1 billion owed to Guaranty Trust Bank (Kenya).
Mr Wainaina wanted the lender barred from selling, transferring, or otherwise disposing of a pasteurising machine, owned by Jungle Cashews (EPZ) Limited, to any third party pending the hearing and determination of the commercial dispute.
However, Justice Peter Mulwa found that the lender had sold the machine for Sh70 million in June 2024 and therefore there was no action to be blocked by the court.
Mr Wainaina disputed the bank’s value of the machine and wanted the court to compel the bank to produce a valuation report, documentary evidence of bids and a detailed explanation of how the sale price of Sh70 million was arrived at.
In addition, he sought a proper statement of accounts showing how the said sale proceeds were applied to the company’s loan accounts.
The dispute concerned the loan amounts of $4,311,795 (Sh557,060,384) and Sh447,142,376 received by the company and defaulted, totalling Sh1 billion.
The bank’s head of credit risk management, Teddy Donat, told the court that the machine was sold at fair market value on June 20, 2024, following the borrower’s persistent defaults with all requisite notices.
The bank said the auction was conducted with the full knowledge and consent of Mr Wainaina. The application to set aside the auction was filed in August 2024.
Dismissing the application, Justice Mulwa said that Mr Wainaina had failed to establish an arguable case against the bank as the evidence was undisputed that the company had obtained loan facilities.
“Mr Wainaina, Hellen Wambui Kimani, Jungle Nuts Limited and Jungle Macs (EPZ) Limited acted as guarantors and a debenture was executed over the pasteurising machine. After default on repayments, the facilities were restructured, default recurred, and notices of sale were issued pursuant to the power of sale,” the judge noted in a decision dated April 24, 2025.
He added that since the asset had been sold, the injunction sought by Mr Wainaina could not be granted.
“Injunctive relief must operate prospectively and not retrospectively. Accordingly, the prayer for injunction is declined,” he said.
As for the disclosure of the loan accounts, the judge held that it was premature because disclosure is governed by the procedural framework applicable after the filing of the statement of claim and during the pre-trial phase.
The court also found that there was a procedural irregularity on Mr Wainaina’s part because one of his companies, Jungle Macs (EPZ) Limited, which he listed as a plaintiff in the case, was under administration.
“560(1)(d) of the Insolvency Act is explicit. No proceedings may be commenced or continued against a company under administration without leave of the court. Jungle Macs (EPZ) Limited is under administration, and no leave was sought,” said the judge. He upheld the objection raised by the bank.
However, Justice Mulwa said the claims by Mr Wainaina remain properly before the court and would be considered on their merits.
