After an audit done by the Commission for University Education (CUE) last year revealed that Presbyterian University of East Africa (PUEA) had an unpaid arrears on salaries and allowances amounting to more than Sh600 million, the P.C.E.A church fraternity has found itself in a messy financial burden that will see it loose a coastal hotel valued at 1.7 billion Kenya shillings if members fail to respond to an urgent call by Rev Peter Kaniah, the secretary-general of the Presbyterian Church of East Africa (PCEA).
In his letter to 56 presbyteries, Rev Kaniah’s has urged them to raise Sh13 million each month in order to offset a loan of Sh761 million, which the hotel owes the National Bank of Kenya.
The Presbyterian Foundation borrowed Sh811 million from NBK in 2007 to finance the acquisition of Milele Beach but as of 2016 had repaid only Sh84 million.
The church and NBK have been tussling over auctioning the hotel since 2014.
“All the parishes shall share Sh13 million per month for a period of two years during which the Head Office shall complete construction of the houses and sell them to clear the Sh761 million (debt),” he wrote.
The money raised will not go directly to the loan repayment, but will be used to finish construction of an apartment of 64 units, which stands next to the hotel but which has stalled due to lack of funds.
With the money, the church hopes to complete the apartments and sell them within two years in order to raise money to pay back the NBK loan. “We expect to raise Sh1.2 billion should we sell the apartments,” Rev Kaniah said. The hotel is valued at Sh1.7 billion, he said in the letter.
The Sh1.7 billion Milele Beach Hotel in Mombasa, formerly known as Giriama Beach Hotel, was bought in August 2007 from the late Eliud Mahihu who was the Coast Provincial Commissioner in the government of President Jomo Kenyatta.
However, in September 2016, High Court Judge Anne Omollo gave the NBK the green light to auction the resort to recover a Sh727 million loan balance (which has now risen to Sh761) from the church, but this was halted following negotiations between the church and the bank.
A senior member of the church who requested not to be named for fear of attracting backlash from its leadership felt that the church had departed from its core mandate of winning souls for Christ.
“This church, with its institutions, is terribly failing at that,” he said. “These institutions were supposed to lessen the financial burden of running this church but instead they are being mismanaged and the members have to bail them out time and again.”