Kenya’s property at risk of sale over Sh1bn Anglo Leasing debt

Kenya’s property abroad risks being auctioned as the Treasury awaits guidance from the Attorney-General on payment of Anglo Leasing debts.

The government had been given until Monday to pay Sh924 million ($10.6 million) to First Mercantile Securities Corporation following a December 2012 judgement in a Swiss court.

FAILURE TO CLEAR

The firm’s lawyers, Tavers Smith, had warned that failure to clear the debt could precipitate proceedings to enforce the judgement in England. Essentially, this means that Kenya’s properties abroad could be attached and auctioned.

However, Treasury Cabinet Secretary Henry Rotich said he had referred the matter to the State Law Office and was awaiting guidance.

“The important thing is that settling these debts can be a three month process. The A-G is going to advise us on how to manage the settlement to ensure that it works,” said Mr Rotich.

He said First Mercantile was yet to attach any of Kenya’s properties abroad.

Officials from the State Law office had not responded to calls from the Daily Nation for comment by the time of going to press advising reporters to contact the A-G’s office today at 9 am.

In the letter to the National Treasury and Attorney-General Githu Muigai, First Mercantile threatened to “take steps with a view to commencing enforcement proceedings in England to recover the judgment debt and any related costs.”

“Despite repeated demands for payment, the judgment debt remains unpaid. Interest on the judgment continues to accrue,” the letter dated March 5.

SIGNIFICANTLY HIGHER

It is feared that what is due could be significantly higher than $10.6 million given that the government is charged an interest of $1,400 (Sh126,000) daily for failing to pay.

“We understand that First Mercantile’s Kenyan advocates, A. H. Malik & Co, have previously written to the Republic of Kenya in relation to the non-payment of the debt but that the Republic of Kenya has neither responded to that correspondence nor paid the debt to First Mercantile,” reads a letter.

Mr Rotich had told the Nation that money to settle the debts would be factored in the second supplementary budget estimates expected in parliament in May.

Anglo Leasing remains one of the biggest scandals in Kenya and has cost taxpayers billions of shillings paying for goods that were never delivered.

The government had promised to ensure no tax-payers’ money would be lost in the scam but efforts to appeal against the judgment have borne no fruit.

Mr Rotich now hopes parliament approves his request to be allocated money to settle the debt alongside another one owed to Universal Satspace Company.