Sidian denies approving loan for Coast banking institution

Sidian Bank has distanced itself from claims that it approved a Sh50 million loan to Golden Services Organisation (GSO) that allegedly collapsed when the lender failed to disburse the said facility.

The bank’s credit manager in charge of recoveries Collins Sabatia said the bank did not approve the loan that has led to the filing of a court case against the Centum #ticker:ICDC-owned lender for allegedly being responsible for the demise of the Coast-based table banking project.

“The bank had not yet approved the said facility, leave alone agreeing to disburse the money,” he told Environment Lands Court Judge Anne Omollo.

Mr Sabatia was testifying in a case where GSO has sued Sidian for allegedly killing the table banking services it was providing for youth and women on the Coast when it approved but did not disburse the loan facility.

The collapsed microfinance business is claiming general damages amounting to Sh140 million.

GSO’s trustees claimed in suit that the lender, formerly known as K-Rep Bank, was envious of its competing business and hence plotted to sabotage the enterprise by denying it funds.

Mr Sabatia, however, countered GSO’s claims, arguing it was illogical and irresponsible for the complainants to make promises to their clients and hinge its entire business model and cash flow projection on the basis of a loan request that was still pending approval.

“The plaintiff cannot therefore hold the bank liable for the perceived losses or special damages arising as a consequence of the plaintiff’s allegedly impaired lending operations,” he said.