Former Wajir Governor Declared Bankrupt Due to Sh7.6m Debt
The High Court has announced that Mohamed Abdi Mohamoud, the ex-Governor of Wajir, has been officially declared insolvent. This declaration comes as a result of his inability to settle a debt of Sh7,621,724.91 to a construction firm that provided him with construction materials.
On July 21st of this year, Justice David Manjanja from the High Court in Nairobi ruled that Mr. Abdi and his spouse, Kheira Maalim Mohamud, were declared bankrupt. This decision followed a bankruptcy petition submitted by the company they own, Autosteel and Tiles Limited.
The corporation provided construction supplies to the governor for building his commercial space, namely the Sunrise Shopping Mall located in Eastleigh.
In 2010, the company decided to pursue legal action against the couple for non-payment. Following a court ruling by Justice Francis Tuiyott on January 17, 2020, the couple was instructed to pay the company Sh4.1 million. However, they did not fulfill this obligation, leading to the debt accumulating to Sh10.6 million due to accrued interest and court-related expenses.
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The ex-governor had engaged in an unregulated and optional arrangement with the company, committing to provide 3 million Kenyan Shillings by March 10 of the previous year. Additionally, they were to deliver another 1 million Shillings before March 25 and settle the remaining 4 million Shillings by May 20 of the same year.
Remaining debt
Nonetheless, the governor made a payment of Sh985,000 on April 28 in the previous year and a further Sh2 million on May 20 of the same year. Despite this, no further payments were made afterward. As a result, the company initiated insolvency proceedings due to the unpaid amount of Sh7.6 million.
The corporation, using the services of Oluoch Olunya Law Firm, submitted a request to the court to officially label Mr. Abdi and his spouse as bankrupt. This action would lead to the transfer of their assets to a receiver, facilitating the company’s debt recovery process.
Justice Majanja approved the requests. The judge observed that the sum under consideration had remained unpaid since January 2020, despite numerous assurances of payment.
“A judgment debt is an unconditional demand for payment. There is no reason why a bankruptcy order should not be made as the judgment debt has not been paid, is uncontested, and has been outstanding since 2020 when the judgment was issued against the debtor (Mr. Abdi and his wife). This is clear evidence of the debtor’s inability to pay,” he said in the ruling.
Former Wajir Governor Declared Bankrupt Due to Sh7.6m Debt
