A widow has secured a temporary reprieve after the High Court barred Equity Bank from auctioning her property in Nairobi over a disputed Sh377 million loan guarantee she claims was forged using her title deed.
In the case highlighting growing concerns over fraudulent land transactions and banks’ due diligence in verifying guarantors, the court halted the sale of Rosemele Anyango’s property pending the determination of a lawsuit where she accuses the bank, her brother, and a company linked to him of conspiring to fraudulently use her land as collateral.
Ms Anyango, the registered owner of the property, insists she never guaranteed any loans for Tembo Tamu Limited nor signed documents charging her land to Equity Bank.
She alleges her brother held her title deed since 2018 following the deaths of her husband and son.
Her shock came in May 2024 when Equity Bank issued a redemption notice demanding Sh377.6 million, threatening to sell her property over Tembo Tamu’s loan defaults.
Forensic analysis later revealed that her signatures on the loan documents had been forged.
She claims that any charge or security instrument created over the property in question was done fraudulently and without her knowledge or consent, and in conspiracy with the respondents (the bank, the company and her brother).
She contends that she is neither a director nor a shareholder of the company and thus not privy to its activities.
Ms Anyango further contends that she did not issue any power of attorney to the advocates involved in the deal to enter into transactions and sign documents pertaining to the property. Her signature is not on the offer letter dated July 3, 2020.
Additionally, she says she never appeared before the advocate named in the court papers to execute a personal guarantee and indemnity, maintaining that her signature is a forgery.
The bank, however, maintains Ms Anyango willingly guaranteed loans totalling Sh290 million advanced to Tembo Tamu between July and October 2020.
Through its legal manager, Equity Bank argued she executed a personal guarantee and deposited her title deed as security.
Statutory notices under the Land Act were served, and valuers assessed the property before the planned auction. The bank dismissed her forgery claims, insisting she participated knowingly and willingly.
However, the court found Ms Anyango had established a strong case against Equity, warranting court intervention. The court ruled she had demonstrated the likelihood of suffering irreparable harm.
The court emphasised that allegations of forgery – backed by a forensic report – raised serious questions that required full scrutiny at trial.
‘If proven, the charge would be void ab initio,’ the court stated, noting that allowing the sale would risk ‘sanctioning an illegality’ and irreparably violating Ms Anyango’s constitutional right to property under Article 40.
The dispute centres on whether Ms Anyango indeed executed the charge documents and guarantee, or whether they were forged and fraudulently procured.
‘That question goes to the root of ownership rights and the validity of the securities sought to be enforced by the bank,’ said the court.
The court ruled that the balance of convenience favoured Ms Anyango because, if the property were sold and forgery later proven, she would suffer a permanent deprivation of property in violation of her constitutional rights.
Conversely, the bank could still recover debts from Tembo Tamu without selling her land. The company and Ms Anyango’s brother did not participate in the proceedings. The injunction remains in force until the suit is determined.
Similar disputes have surged in the recent past, with courts increasingly scrutinising lenders’ processes amid claims of forged documents and identity theft.