Former Lugari MP Cyrus Jirongo has been declared bankrupt after the High Court found that he was unable to service his debts.
Judge Olga Sewe ruled that the politician was unable to pay debt amounting to Sh700 million, which he owed some eight companies.
The bankruptcy application against Mr Jirongo had been filed by the companies, which include Masole Ltd, Baia Enterprises Ltd, Gilera Ltd, Koti Developers, Saman Developers Ltd, Kenete Enterprises Ltd, Marimio Enterprises Ltd, and Linsala Enterprises Ltd.
“The court hereby orders that Mr Jirongo, a businessman, be adjudged bankrupt,” read the court order. The court also directed that an official receiver be appointed as trustee of his estate.
Bankruptcy laws provide that the said official receiver is supposed to manage the property towards repayment of the amount owed.
Mr Jirongo had secured Sh700 million loan from the National Bank of Kenya using properties registered under the name of the said companies. He, however, failed to repay the loan and the bank sold the properties on May 22, 2009 through public auction.
However, the politician entered into an agreement with businessman Sammy Boit Arap Kogo, the owner of the companies, and agreed to pay Sh700 million, which was the market value of the said properties.
“This was to be compensation for the loss occasioned to the companies whose assets had been sold,” Mr Kogo said.
Yet again, Mr Jirongo failed to pay the sum within the stated period, as had been agreed through consent, forcing Mr Kogo on behalf of the companies to institute a suit against him for payment of the said debt.
Mr Jirongo failed to defend the case or file any response in the case which sought Sh700 million plus interest from him. A judgment was thus entered against the former MP around 2014, for the sum of Sh700 million plus interest and costs of the suit.
Since then however, the Kanu-era politician failed to pay the sum demanded, prompting the companies to file an application seeking a bankruptcy order against him and that his estate be vested with the Bankruptcy Trustee, which has now been granted.
There are currently several other cases in different courts where Mr Jirongo is being pursued for failing to pay various amounts of money advanced to him by institutions and individuals.