Borrowers on Edge as Banks Gain Power to Auction Without Licensed Agents
High Court Ruling Redefines Kenya’s Auction Landscape
The High Court of Kenya has reshaped the country’s auction framework, siding with commercial banks against licensed auctioneers in a long-standing regulatory dispute. Justice John Chigiti ruled that the Auctioneers Licensing Board (ALB) has no disciplinary authority over banks and credit institutions that conduct asset auctions.
Key Findings
- Justice Chigiti affirmed that banks and financial institutions are regulated by the Central Bank of Kenya (CBK) and relevant sector regulators.
- Licensed auctioneers remain governed by the Auctioneers Act but cannot impose disciplinary measures on banks.
- The ruling followed a petition by the Kenya National Society of Professional Auctioneers (KENSAP), challenging banks for conducting auctions without licensed agents.
Court Decision and Reactions
“Banks are not directly regulated by the Auctioneers Licensing Board and therefore cannot be disciplined within its framework,” stated Justice Chigiti.
The judgment represents a major victory for banks, which described the prior dual oversight as “double regulation.” However, auctioneers expressed concern that the verdict could marginalize their profession as financial institutions bring auction functions in-house.
Economic Impact
Kenya’s auctioneering industry, valued at about KSh 15 billion annually according to the 2024 Auctioneers Board report, faces mounting challenges from bank-led recovery units and unlicensed competitors.
Author’s Summary
The court’s decision cements CBK’s sole authority over financial institutions, signaling a shift in Kenya’s asset recovery system and unsettling licensed auctioneers.