Former Lugari MP Cyrus Jirongo was has been declared bankrupt after a judge found he was unable to pay a debt running into hundreds of millions of shillings.
Commercial Court judge Olga Sewe ruled in favour of businessman Sammy Kogo, Mr Jirongo’s creditor, and ordered that the latter’s estate should be placed under receivership.
“Having heard the petitioner and having read the creditor’s petition, and having seen the exhibits, the court hereby orders that Shakhalanga Khwa Jirongo be adjudged bankrupt by virtue of the bankruptcy order,” ruled Justice Sewe.
“The court further orders that an official receiver be appointed as a trustee of the estate of the bankrupt.”
Mr Kogo allowed Jirongo (right) to secure a loan from National Bank using his properties as security. However, he failed to repay the lender.
At the centre of the battle between the politician and the businessman are properties held under Masole, Linsala Enterprise, Bain Enterprises, Saman Developer, Gileta, Koit Developers and Kenete Enterprises Ltd.
In the suit, the judge heard that after Jirongo defaulted, National Bank sold the properties at a public auction in 2009, after efforts to have the former presidential candidate pay back Sh60 million failed.
The suit between him and the bank began back in 2006. The eight companies sued Jirongo, National Bank and Bethlehem Trading East Africa for allegedly illegally benefiting from the securities given to him.
It was then that the bank made a court application seeking to have the politician place security for the case after it discovered, through a search, that the eight companies had not filed their tax returns.
The total share capital of all the companies, except Linsala, was found to be Sh120,000.
The search also revealed that all the companies had secured Sh20 million each. Linsala on the other hand had secured Sh40 million.
On November 30, 2006, the High Court ordered that he should place Sh5 million as security within 30 days.
He then entered into an agreement with Kogo that he would repay Sh700 million, the value of the eight properties.
The politician was given 180 days to repay the money in September 12, 2013, but he never did. Neither did he appear in court and the orders were thus given undefended.
The politician has also been sued by Central Organisation of Trade Unions Secretary General Francis Atwoli for allegedly failing to repay a Sh110 million debt.
Mr Atwoli told the court Jirongo had undertaken to repay the loan but he never did.