Why The Deeply Flawed 2015 Loan Is Haunting Tuju Today

Former CS Raphael Tuju’s loan has become one of Kenya’s most controversial financial and legal cases, not because of politics or persecution, but because of a deeply flawed deal that collapsed under its own weight. In 2015, Raphael Tuju secured a USD 9.3 million loan from the East African Development Bank at a time when he wielded immense political influence. What followed was a rapid default, years of courtroom losses, and eventual asset seizures. Today, the consequences are unavoidable, and the narrative is no longer about sympathy but about accountability. Tuju’s loan was irregularly approved through abuse of bank leadership. He failed to honour repayment terms, and claims that a top politician is grabbing his property are false and unsupported. How Power, Influence and a Flawed Deal Shaped Tuju’s Loan Crisis Tuju obtained the loan through his company, Dari Limited, with the intention of acquiring a 20-acre property in Karen known as Entim Sidai and developing luxury villas for sale.

On paper, the project appeared commercially viable. In reality, the structure of the loan and the circumstances under which it was approved raised serious concerns within the bank from the very beginning. The Loan Structure and Early Warning Signs The facility, signed in April 2015, relied heavily on the same property it financed as collateral, a structure that significantly increased the lender’s risk exposure. While such arrangements are not unheard of, insiders at the bank reportedly questioned both the speed of approval and the level of comfort extended to Tuju despite those risks.

At the time, Tuju’s proximity to then-President Uhuru Kenyatta placed him at the center of power. That influence appears to have shaped the environment in which the loan was processed, creating the perception that standard safeguards may not have been applied with the necessary rigor.

Funds were disbursed, and the acquisition went through. However, the project failed to gain the momentum required to sustain repayment obligations, exposing the weaknesses embedded in the original deal. Rapid Default and Escalating Debt The most damaging aspect of Tuju’s loan is how quickly it fell apart. By the second quarter of 2016, barely a year after disbursement, the loan had already gone into default. This was not a case of long-term market challenges or unforeseen shocks. It pointed to deeper structural and financial miscalculations.

The bank issued demand notices in 2017, but these were not acted upon in any meaningful way. Interest and penalties continued to accumulate under the loan agreement, pushing the total debt to over USD 15 million, approximately KSh 1.9 billion.

Faced with non-payment, the lender escalated the dispute to the High Court in England, where both parties were represented. The court ruled in favor of the bank in 2019, affirming the full amount owed. Kenyan courts later adopted and upheld that judgment in 2020 and again in 2023 at the Court of Appeal.

These rulings were not isolated decisions. They formed a consistent legal position across jurisdictions, confirming that the debt was valid and enforceable. The Role of Vivienne Yeda Apopo and Internal Fallout During the period in question, the bank operated under the leadership of Vivienne Yeda Apopo, who served as Director-General and CEO. Her tenure coincided with both the issuance of the loan and the prolonged dispute that followed.

The handling of Tuju’s loan reportedly triggered internal resistance within the institution. Senior managers raised concerns about governance, risk exposure, and the broader implications of the transaction. These tensions did not remain confined within the bank.

Around 2021 and 2022, discontent within the institution escalated to the point where sections of management reportedly sought intervention from Yoweri Museveni. This move reflected a serious breakdown in confidence and highlighted the extent to which the loan had become a symbol of deeper inst…