Exim Bank to auction Mkono’s Baobab assets

Dar es Salaam. Exim Bank Tanzania has confirmed that it is auctioning two floors at Exim Tower--that belong to Baobab Properties after the failure of the latter to dispose of them and repay the outstanding to the bank.

The bank made the revelation in its statement to the press denying allegations levelled against it by a local tabloid that the step was aimed to illegally take the properties of Musoma Rural MP Nimrod Mkono (CCM) to benefit the bank or its director.

But Exim Bank Tanzania said that the step to acquire the property followed the expiry of both the grace period given and further extension, something which made the bank to have no other option but go to court, which gave the bank the liberty to execute the decree in commercial cases No 21 of 2018 and No 59 of 2018 in any manner that the bank saw fit.

The Civil Case No 21 of 2018 was instituted by the bank at the High Court against Mr Mkono following non-compliance with the terms as agreed when he secured a loan from the lender.

According to the bank, this case dealt with and resolved according to the terms of the decree in another case – commercial case No 59 of 2019 – which also involved Mr Mkono as a guarantor of a company known as Baobab Properties Limited. According to the Bank, in June 2014, Exim Bank Tanzania provided a credit facility to Babobab to the tune of $750,000 whose repayment obligations were guaranteed by Mr Mkono.

“Baobab defaulted in its payment obligations. This prompted the bank to issue a statutory notice of default to Baobab and its guarantors on June 13, 2016, repayment’s indebtedness to the bank.

“Despite the notice and several attempts by the bank, Baobab and its guarantors failed to repay the loan as required,” said Exim Bank in its statement.

This forced the bank to initiate efforts to recover the outstanding amount by the realisation of security over a landed property in the name of Baobab located at Kunduchi, Dar es Salaam which Baobab objected by instituting a court case.

This forced the bank to resort to seeking court’s intervention case No 59 of 2018 requesting the court to order Baobab – which is the borrower – and two guarantors to repay the loan with interest.

“For clarity, the said case was not lodged by any of the bank’s shareholders or directors personally, as it has been maliciously misrepresented in the tabloid,” said the bank in the statement. “The case was lodged by the bank against the defaulting company (Baobab) and its guarantors.”

While the case was pending in court, the bank says that Baobab Properties and its guarantors entered into settlement discussion where an amicable discussion was reached and subsequently presented to the court and issued as a ‘consent judgement’ – a judgement based on an agreement between the parties to a lawsuit to settle the matter.

According to the statement, Baobab and its guarantors failed to meet the terms laid down by this settlement forcing Exim Bank Tanzania to resort back to the court case – No 59 of 2018 – to enforce the settlement agreement and consent judgement.

“This process is continuing under the orders of the High Court of Tanzania and letter and spirit of the law,” said the bank in its statement.