Kenya Commercial Bank’s #ticker:KCB move to auction a prime property belonging to the chief executive officer of the fallen retail giant Nakumatt, Atul Shah, has triggered a vicious fight that has sucked in three other banks staking a claim to the property.
Mr Shah, through his firm Collogne Investments Ltd, has accused KCB of mischief, arguing that the Sh2 billion asset is also charged to four banks, including Bank of Africa, DTB Bank #ticker:DTK and Standard Chartered #ticker:SCBK.
He reckons that the bank has breached a consent deal agreed among lenders that placed on ice the auction pending a ruling in the Court of Appeal, where Bank of Africa is fighting to sell the same property.
“The applicant urges this court to consider whether it is necessary to sell the charged land for recovery of the money owing,” says Atul’s son Ankoor Shah, a director of Collogne Investments,
in an affidavit.
“Has the bank made all reasonable efforts, including the use of all other remedies available? This court should stop the planned sale.”
In August, Bank of Africa got the court’s nod to auction Mr Shah’s personal property over loans offered to the collapsed retailer, but the former Nakumatt boss blocked the sale at the Court of Appeal.
KCB argues that it is not party to the Court of Appeal suit and that its absence in the case does not block it from selling the land.
Nakumatt owes Stanchart and DTB Bank a combined Sh4.5 billion and court documents show that they are also eyeing the Sh2 billion property.
The banks offered Nakumatt billions of shillings on the strength of the retail chain’s cash flow.
But Mr Shah used his company Collogne Investments, which owned the Sh2 billion property in Nairobi, as Nakumatt’s guarantor to offer additional comfort to the multiple bank loans.The banks are racing to seize assets linked to Mr Shah and his family to recover the billions of shillings lent to Nakumatt.Mr Shah says the value of the property is far much higher than the loan demanded by KCB, which he maintains was capped at Sh500 million.“The subject security is immovable property and the applicant cannot spirit the same away neither is its value likely to diminish in a manner that would expose the respondent,” the company argues while seeking to suspend the sale.KCB has opposed Collogne Investments’ bid to stop auction, saying that the firm has not met the threshold for the court to stop […]