Royal Media Services (RMS) owner SK Macharia has lost a court appeal seeking to stop a judgement that declared him bankrupt over 34-year.debt.
Mr Macharia and his wife Purity Gathoni had been declared bankrupt over aKsh500,000 debt, which has since ballooned to Ksh293.4 million.
The loss now means that the State will take over and supervise Macharia’s business with the aim of settling all his debts.
The state will now take over his businesses including RMS which houses Citizen TV and other TV and radio stations.
However, Macharia has an option of thwarting the takeover by issuing a plan on how he intends to repay all his debts and enter into court-supervised agreements with all the creditors.
The Attorney General has already appointed Mark Gakuru, the Official Receiver based at the State Law Office, to oversee Mr Macharia’s business empire.
“The Official Receiver will prepare a statement of affairs detailing all his assets and liabilities with a view of setting them. The notice has been issued for the benefit of all creditors and captures all his debts, all bank loans, suppliers and any other creditors,” said a source quoted by Business Daily.
The battle between Macharia and businessman Livingston Waithaka, the managing director of Ocean Freight Transporters Company Limited, has been on since 2001. In 2001, he court ordered Mr Macharia to pay Waithaka the Ksh500,000 debt with an interest rate of 19 percent per anum. The money was given in a land deal that fell through.
Mr Waithaka paid Kh500,000 as a deposit to Mr Macharia in the 1980s for a plot in Nairobi’s Industrial Area which was then valued at Ksh2 million. According to Macharia’s argument in court, Waithaka never paid the remaining balance of Ksh1.5 million.
Mr Waithaka declined to pay for the land following alleged discrepancies in the registrar of lands records.