The chief executive officer of the fallen retail giant Nakumatt, Atul Shah, has lost his Lavington home to auctioneers after the High Court dismissed a petition seeking to overturn the forced sale of the high-end property by KCB Group #ticker:KCB over a Sh2 billion debt.
Justice Francis Tuiyott dismissed the petition by the administrator of the collapsed Supermarket chain, saying it has no chance of success.
Nakumatt’s court-appointed administrator had opposed the sale on grounds that the auction failed to follow the law, and tagged Mr Shah as an interested party to suit.
The bank, through Leakey Auctioneers, early in the year quietly sold the property, which Mr Shah had used as additional security as Nakumatt’s guarantor to offer comfort to the multiple bank loans.
“This court is not persuaded that the suit, as currently presented, demonstrates a prima facie case with a probability of success. Being unable to surmount that hurdle, it is needless for this court to discuss other aspects raised in the application,” the judge said.
KCB had earlier sold Mr Shah’s prime property in Industrial Area, Nairobi, to Furniture Palace International Ltd for Sh1.04 billion, court records show.
Nakumatt, which grew from a mattress shop in a rural town to have branches across Kenya and East Africa, was forced to shut down last year as it struggled to repay its suppliers, landlords and other creditors.
Banks owed billions of shillings by the collapsed retailer are fighting over Mr Shah’s personal property to recover the unpaid loans.
While the banks advanced Nakumatt billions of shillings on the strength of the retail chain’s cash flow, Mr Shah also offered his personal properties as guarantees for swift disbursements of the credit.
The Lavington home was offered as security in 2011 and accounted for Sh25 million in the multi-billion shilling loans.
The sale of the personal property marks a new low for Mr Shah, who for decades occupied the corner office of the regional retail business.This prompted global institutions like Financial Times to name the former Nakumatt CEO as one of the top 50 influential businessmen in the world, alongside Equity Bank’s James Mwangi and Nigeria’s leading industrialist Aliko Dangote.After the Nakumatt empire collapsed, the 59-year-old entrepreneur has remained in the shadows, never uttering a word in response to the unrelenting media coverage of the business’ miseries.Justice Tuiyott wondered why the court-appointed administrator, Peter Kahi, was the one fighting to reverse the auction and not Mr Shah.“No good reason […]