Mombasa Widow Battles Diamond Trust Bank Over $1.5M Property Auction in Court of Appeal

Mombasa tycoon's widow Noor Ali Islam Jeizan filed an appeal to the Court of Appeal to block Diamond Trust Bank from selling her property over a disputed Sh174 million loan. Islam claims the loan was fully repaid with an additional Sh17 million due for refund, while the bank contends that Islam and her late husband consented to the sale of company assets and that the loan is outstanding. The dispute stems from a loan issued to Anwar Mohamed Bayusuf Limited, in which Islam alleges fictitious accounts were created, leading to the contested amount.

Mombasa Widow's Appeal to Block Property Auction in Sh174 Million Dispute with Diamond Trust Bank

In a contentious legal battle that has escalated to the Court of Appeal, Noor Ali Islam Jeizan, the widow of Mombasa tycoon Bayusuf Mohammed, is vehemently opposing Diamond Trust Bank's (DTB) attempts to sell her property in order to recover Sh174 million in alleged unpaid loans.

Islam vehemently contends that the loan taken by her late husband was fully repaid, with an excess of Sh17 million that the bank should have refunded. Despite her plea to halt the auction, High Court Judge Kizito Magare dismissed her request.

Aggrieved by the decision, Islam has appealed to the Court of Appeal, arguing that her children and elderly mother will be left homeless if DTB proceeds with the sale of the disputed property. "The property scheduled for auction is a residential house where my children live together with my elderly mother. Unless the orders sought are granted, my children and elderly mother will be left destitute of a home," she pleaded in her appeal.

The dispute centers around a company owned by Islam and her late husband, Anwar Mohamed, called Anwar Mohamed Bayusuf Limited. DTB has already sold off a yard and trucks belonging to the company, claiming non-payment of the loan. The loan agreement stipulated that the company was obligated to pay at least 26 percent per annum as interest on the borrowed amount. Additionally, the bank has targeted the house inherited by Islam, placing it up for auction last year.

At the heart of the conflict between Islam and DTB lies the contested sum of Sh174 million. Their respective accounts of the matter differ starkly. Islam alleges that DTB fabricated fictitious accounts, resulting in the inflated amount. She asserts that the loan taken by Bayusuf Limited was repaid in full on June 30, 2011, with an excess of Sh17 million. This followed the auction of an earlier property used as collateral for the company's loan.

Islam claims that the bank is withholding crucial documents that would corroborate her claim that Bayusuf has no outstanding debt to DTB. In contrast, DTB maintains that a consent agreement reached between the parties on July 17, 2021, obliged the bank to release all relevant documents, including details of the disputed accounts. The bank argues that its case against Islam is supported by an independent report from the Interest Rates Advisory Centre (IRAC), which confirms Bayusuf's indebtedness. DTB dismisses Islam's request for additional documents as a "fishing expedition."

The saga between Islam and DTB began with a loan extended to Bayusuf Limited. The dispute has since escalated from civil proceedings to criminal investigations, with Islam demanding full disclosure of the accounts. Correspondence between her attorneys and the Central Bank of Kenya (CBK) reveals that the regulator encountered difficulties in obtaining comprehensive information from the bank regarding the circumstances that led to Bayusuf accumulating such a substantial debt.

As the Court of Appeal prepares to hear Islam's appeal, the outcome of this protracted legal battle remains uncertain. The legal drama has garnered significant attention, raising questions about the nature of banking relationships, the rights of borrowers, and the efficacy of the Kenyan financial regulatory system.