The Court of Appeal has refused to reverse an auction of a property belonging to former Nakumatt CEO Atul Shah, which was auctioned for Ksh1.04 billion by the Kenya Commercial Bank (KCB).
This is the second property belonging to Shah to be auctioned by KCB after his Lavington home over a Ksh2 billion debt he guaranteed for Nakumatt.
The property which hosted Nakumatt headquarters and other tenants was auctioned in a haste, even as KCB feared that other lenders would come for it to recover debts owed to Nakumatt.
According to Shah, the property located Nairobi’s Industrial Area, was undervalued during the hastly conducted auction.
However, the Court ruled that the auction could not be reversed, since the buyer, Furniture Palace International Ltd, had not been joined in the case.
“It will thus be unfair and unjust to issue an injunction that will affect its proprietary rights without being accorded an opportunity to be heard. Finally, the debt is not denied,” ruled Justices William Ouko, Roselyn Nambuye and Asike Makhandia.
Other banks that were eying the property before it was sold by KCB include Stanchart and DTB Bank, which are demanding a combined Ksh4.5 billion.
Nakumatt closed shop with debts amounting to Ksh30 billion, with Ksh18 billion owed to suppliers, Ksh4 billion to commercial paper holders and the rest to banks.
Nakumatt owes DTB Bank Ksh3.6 billion, Stanchart Ksh900 million, KCB Ksh1.9 billion, Bank of Africa Ksh328 million, UBA Ksh126 million and GT Bank Ksh104 million.
DCI’s Anti-Banking Fraud Unit is probing Nakumatt for alleged theft and money laundering.