Peter Munga Loses Sh510M in Britam Shares Auction

Business tycoon Peter Munga has suffered a major legal blow after the High Court rejected his attempt to stop the auction of his 75 million Britam Kenya shares. The shares, valued at approximately Sh510 million, will be sold to recover a Sh433.76 million loan default owed to ABC Bank.

Court Slams Munga for Abusing Legal Process

Justice Dorah Chepkwony of the Kiambu High Court dismissed Munga’s application, accusing him of filing multiple cases in different courts to secure a favorable ruling. She ruled that Peter Munga actions amounted to an abuse of the judicial system and lifted the temporary orders that had blocked the auction.

“This conduct constitutes an abuse of court process warranting immediate intervention,” Justice Chepkwony stated. “The interim orders are set aside and discharged forthwith.”

Loan Default Triggers Share Seizure

The dispute traces back to a loan taken by Munga’s company, Equatorial Nut Processors, which he personally guaranteed. After the company defaulted, ABC Bank issued a demand notice in September 2024 for Sh433.7 million. When Munga failed to settle the debt, the bank moved to recover the amount by attaching his Britam shares.

Munga’s Legal Arguments Rejected

Peter Munga had argued that:

• The loan interest had surpassed the principal amount, violating the *in-duplum* rule.
• Other securities should be prioritized before his shares.
• He intended to use the shares as collateral for another loan.

However, Justice Alfred Mabeya earlier ruled that ABC Bank was within its rights to auction the shares since the debt remained unpaid.

Financial Fallout for the Business Mogul

With the court’s decision, Munga stands to lose shares worth Sh510 million—a significant financial setback. The case serves as a stark reminder of the risks associated with loan guarantees and collateral-based financing.

What This Means for High-Profile Borrowers

This ruling underscores the legal consequences of defaulting on secured loans, even for wealthy individuals. For ABC Bank, it reaffirms the enforceability of loan agreements and collateral recovery processes.

As the auction proceeds, the business community will be watching closely to see how this high-stakes financial battle concludes.