The High Court has allowed the Co-operative Bank to auction the 12-storey Musco Towers in Eldoret town to recover a Sh553 million owed by a varsity sacco.
More than 3,000 Moi University Savings Co-operative Society shareholders had made a final appeal to the court to stop the auction.
But Justice Hellen Omondi on Friday directed that the sale proceeds, dashing hopes by the workers of saving their property.
Shareholders' representative Susan Chepchirchir said they had given up on the court process and would now appeal to local leaders to intervene in the matter.
They have sent a petition to Uasin Gishu Senator Margaret Kamar to help them save the asset as a final desperate measure.
“The court has made its ruling on the matter and we do not intend to appeal the decision. We are taking the battle to the Senate as that is our last resort,” Chepchirchir said.
The bank and Musco have battled in court for 10 years over the money which the bank had lent to the society to put up the building.
Justice Hellen Omondi ordered the bank to attach and sell the landmark building because the society had been unable to repay the loan.
The financially-troubled sacco has members from Moi University, University of the Eldoret and Moi Teaching and Referral Hospital staff in Eldoret.
Contractor Fredrick Opondo of Dinesh Construction Company had applied to be enjoined in the suit to demand payment for putting up the building.
Justice Omondi said Musco had failed to pay Sh141 million to the contractor who completed work and handed over the building as per their contract.
She said the contractor’s case had earlier been heard by a tribunal which awarded the Sh141 million together with interest at a rate of 14 per cent per annum from June 17, 2015.
Musco had challenged the decision at the High Court but failed and the tribunal’s findings were upheld.
Justice Omondi ordered that the matter shall be marked as settled in its entirety upon the filing of this consent. Each party shall bear its own costs.
The building and the plot on which it is located adjacent to Sirikiwa Hotel are valued at more than Sh500 million.
Justice Omondi said that from the documents provided, Musco obtained funds between 2008 and 2016 from the bank but failed to honour their financial obligations on repayments.
“Musco gave the suit property to the bank willingly and as security which was to be realised in the event of default in repayment,” she said.
She said the bank issued several demands and statutory notices which were ignored by the society.
The judge also ruled that the workers, who are shareholders of Musco Towers, lacked the capacity to sue on behalf of the registered Moi University Savings and Co-operative Society.
