Prominent businesswoman Mary Wambui Mungai has secured a reprieve from the auction of the multi-billion-shilling Glee Hotel after the High Court ordered her to deposit KSh100 million within seven days as a condition for halting the sale.
The ruling offers Wambui a crucial lifeline in a high-stakes dispute with Equity Bank over an alleged loan default amounting to KSh8.267 billion, a debt that has placed one of Nairobi’s most luxurious hospitality facilities at the centre of an intense legal battle.
In its decision, the court directed that Wambui deposit KSh100 million within a week. Failure to comply with the order will automatically lift the temporary protection granted by the court, allowing the lender to proceed with the planned auction of the hotel.
At the heart of the dispute is the Glee Hotel, an upscale hospitality establishment situated along Nairobi’s Northern Bypass in the affluent Runda area. The property, estimated to be worth approximately KSh9.5 billion, sits on eight acres of land and boasts 211 guest rooms, modern conference facilities, and premium hospitality amenities.
Court documents reveal that efforts to resolve the dispute through negotiations failed despite several attempts by the parties. According to filings presented before the court, Wambui initially proposed a KSh5 billion settlement to resolve the outstanding debt, but the offer was rejected by the bank.
She later tabled an improved proposal of KSh7 billion, hoping to avert recovery proceedings and save the hotel from auction. However, the lender reportedly declined the proposal, maintaining that the debt remained unpaid and enforceable under the existing lending agreements.
As a result, Equity Bank moved to initiate recovery proceedings, setting the stage for a legal showdown over the future of the luxury property.
In her application seeking to stop the auction, Wambui argued that the bank should first pursue the principal borrower and exhaust all available securities before targeting assets linked to guarantors.
Her legal team maintained that lenders should not move directly against guarantors without first exploring recovery options against the primary borrower.
“The bank ought to first pursue the principal borrower and exhaust the available securities before moving against a guarantor,” her lawyers argued in court filings.
Equity Bank, however, insisted that it is legally entitled to enforce securities and guarantees once a borrower defaults. The lender argued that the debt remains outstanding and recoverable under the terms agreed upon by the parties.
The case has attracted significant attention within legal and financial circles because it raises important questions regarding the rights of lenders to pursue guarantors in large commercial transactions and the extent of protection available to individuals who provide guarantees for corporate borrowing.
In granting interim relief, the court sought to balance the competing interests of both parties by temporarily preserving the hotel from immediate sale while requiring a substantial financial commitment from Wambui as security.
“The applicant shall deposit KSh100 million within seven days, failing which the interim orders shall automatically lapse,” the court directed.
The ruling now places Wambui in a race against time as she seeks to mobilise the required funds before the deadline expires.
Should she fail to make the deposit, Equity Bank will be free to proceed with the auction process in a move that could result in the loss of one of Nairobi’s most valuable hotel properties.
The matter is expected to return to court for further hearings as judges consider the broader dispute over debt recovery, enforcement of guarantees, and the future ownership of the multi-billion-shilling hotel.
For now, all eyes remain on whether Mary Wambui can raise KSh100 million within a week and keep the auctioneers at bay.
