If you owe someone, pay up as soon as you can, otherwise the debt can return to haunt you years later in a very big way. Business tycoon Samuel Kamau (SK) Macharia has learnt that the hard way after a debt of Ksh500,000 ballooned to Ksh155.6 million over three decades.
The Royal Media Services chairman found himself owing the hundreds of millions after losing three decade battle to bar businessman Livingston Waithaka from declaring him bankrupt for failing to refund him Ksh500,000 in a land deal that fell through.
Mr Waithaka says he paid Ksh500,000 as deposit to the couple in the 1980s for a plot in Nairobi’s Industrial Area which was then valued at Ksh2 million.
Mr Macharia and his wife, Purity Gathoni, had challenged the debt in the bankruptcy proceedings initiated by Mr Waithaka through his company, Oceanfreight Transport.
Last week, Court of Appeal judges William Ouko, Asike Makhandia and Gatembu Kairu ruled that Mr Macharia and his wife challenged the court ruling on the existence of the debt instead of the bankruptcy suit.
The couple says the earlier High Court judgment was based on inaccurate information and that the judges had ignored the basis of the debt.
In October 2001, then High Court Judge Rawal issued judgment against the couple and directed them to pay a sum of Ksh500,000 with interest at 19% per annum from December 6, 1986. The debt has since risen to Ksh155.6 million based on the court ruling.
The land was in 1994 allocated to Malaki and Somche Traders after Macharia failed to pay Ksh636,970.
Macharia ignored the ruling until 2008 when Waithaka served him with bankruptcy notices. SK Macharia acknowledged receiving the Ksh500,000, but maintains Mr Waithaka owes them Ksh1.5 million as balance for purchase of the plot, off Enterprise Road.
They argued that the land deal was botched by Mr Waithaka after he declined the plot despite paying the Sh500, 000 deposit. The land was allocated to the Macharias by the State in 1982 and they were expected to pay Ksh636, 970 for the property.
They later agreed to sell the property to Mr Waithaka, who declined the lands after its records indicated it was along Biashara Street in Nairobi’s city centre and not Industrial Area plot, according to court filings.
The land was in 1994 allocated to Malaki and Somche Traders after Macharia failed to pay the Ksh636,970 and later sold to Excelo Structures.
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