Former Kisumu Governor Jack Ranguma is facing bankruptcy suit following a ten-year debt and a protracted legal duel with an insurance company.
Mua Insurance moved to court to have Ranguma declared bankrupt following a 2012 debt that the firm says still stands at about Sh8 million.
The move comes only six months after the firm successfully secured orders to attach Sh7.8 million from Ranguma’s Absa bank account.
“Take notice that within 21 days after service of this notice on you (Jack Ranguma), excluding the day of service, must pay Mercantile Insurance Company (Now trading as MUA Insurance (Kenya) the sum of Sh1,436,365.38 and USD48,881.20 as September last year which amount continues to accrue interest at court rates,” the insurance firm said in the insolvency cause dated January 22.
“Take further notice that failure to pay the afore-stated amount shall result in Mercantile Insurance Company filing for a bankruptcy order against your estate.”
The insurance firm is represented by lawyer Pearlyne Omamo of ADRA Advocates LLP.
The genesis of the debt is failure of Ranguma’s travel agency to remit proceeds of passenger sales tickets to the International Air Transport Association.
IATA then claimed Mercantile, now re-branded as MUA, with the agreement that the insurance pursue the travel agency.
But the former governor who is now the chairman of Sacco Societies Regulatory Authority is now paying dearly for the debt as the interest continue to snowball.
He has cleared the principal amount by paying Sh9.6 million.
A further Sh7.8 million was attached from his bank account and the insurance company is still demanding Sh8 million.
“The fact that the decree-holder is a successful litigant with the right to reap the fruits of its judgment, I agree with the counsel for the decree-holder that the funds held by the garnishee (Absa Bank) on behalf of the judgment debtor should be used to offset part of the said debt. It's however noted that the said funds are not sufficient to settle the entire debt,” Justice Njoki Mwangi said in a judgment dated September 22 last year.
Ranguma says he has filed an application for appeal against the judgment, claiming that the insurance firm has turned him into a cash cow.
“For a debt of Sh8,961,504, the creditor has now been the recipient of Sh18,613,639.2. I am no longer a debtor but a perpetual cash cow for the purported creditor,” he stated in court papers seen by the Star.
He termed the insolvency suit as an attempt to “steal a march” because of his intended appeal which he says hold “significant merit”
Lawyer Pearlyne Omamo however contends that Ranguma has demonstrated lack of commitment to settle the debt, citing among others his acquisition of properties.
“It was stated by the decree-holder (insurance) that the court records confirm that the judgment debtor (Ranguma) has been acquiring assets and even campaigning for the position of governor in the recently concluded elections in flagrant disregard of his obligation to settle the outstanding sum,” Justice Mwangi said in her judgment.
Ranguma unsuccessfully contested against Governor Anyang’ Nyong’o for the Kisumu gubernatorial seat in 2022.
