Kericho Man Sues Faulu After Losing Property Worth Sh32.5M in Loan Guarantee Dispute

Kennedy Kimutai Salat has moved to court after Faulu Microfinance Bank auctioned his property valued at Ksh32.5 million over a loan he says he was never fully liable for.

Salat’s troubles date back to November 2015, when he agreed to guarantee a loan taken by his friend, Robert Kanuli, director of Kanuli Information Technology Solutions Limited. Kanuli had sought Ksh11 million from Faulu Bank to expand his business. Salat agreed to guarantee half of the amount – Ksh5.6 million – using his Kericho property as security.

He maintains that his liability was limited to the guaranteed amount.

In July 2024, Salat received a redemption notice from Antique Auctioneers indicating that Faulu Bank intended to auction his property to recover Ksh32.9 million after Kanuli defaulted. The debt had grown significantly, and his limited guarantee had been treated as security for the full amount.

By February 2025, the property had been sold at a public auction to Emmanuel Kibet Kirui for Ksh13 million – less than half its estimated value of Ksh32.5 million. When Salat conducted a search at the lands office, he found the title had already been transferred to the new owner.

Salat, through GKL Advocates, filed a suit at the Milimani Law Courts on September 20. He argues that Faulu Bank breached the charge agreement by demanding repayment of the entire loan despite his liability being capped at Ksh5.6 million. He is seeking to have the auction declared illegal, null, and void, and wants to be discharged from liability beyond the guaranteed amount.

Justice Linet Omollo directed that the parties be served and given 14 days to file their responses. The matter has been scheduled for hearing on November 11.

Salat claims he has lost property worth Ksh32.5 million while his liability was only Ksh5.6 million. He says this raises questions about how a limited guarantee evolved into security for the full debt, how an Ksh11 million loan grew to Ksh32.9 million, and why the property was sold for Ksh13 million – less than half of its value.

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