Former Nakumatt CEO loses his Lavington home to auctioneers
The collapsed Nakumatt’s Chief Executive Officer, Atul Shah, has lost his Lavington home to auctioneers.
This is after the High Court dismissed a petition seeking to overturn the forced sale of the high-end property by Kenya Commercial Bank(KCB) Group 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.
“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.
Nakumatt’s court-appointed administrator had opposed the sale on grounds that the auction failed to follow the law, and tagged Shah as an interested party to suit.
The bank, through Leakey Auctioneers, early in the year quietly sold the property, which Shah had used as additional security as Nakumatt’s guarantor to offer comfort to the multiple bank loans.
KCB had earlier sold Shah’s prime property in Industrial Area, Nairobi, to Furniture Palace International Ltd for Sh1.04 billion, court records show.
Shah lost his assets to KCB Group and three other banks over debts worth sh4 billion.
KCB Group was seeking to auction the former Nakumatt CEO prime property over a sh2 million debt.
High Court judge Alfred Mabeya on November 24,2020, allowed KCB to complete the sale of the property in Industrial Area, Nairobi that is also charged at Bank of Africa, DTB Bank and Standard Chartered.
“If the court was in doubt, which is not the case here, the balance of convenience tilts in favour of allowing the defendant (KCB) to recover its outlay. The court was invited to consider that the sale by the defendant would injure and prejudice the rights of the other lenders who have the suit property as their only security. While this court sympathises with the said lenders, it defeats logic how prudent bankers would extend facilities amounting to over Sh4 billion on a single security whose value is less than Sh2 billion,” said Justice Mabeya.
The banks offered Nakumatt billions of shillings on the strength of the retail chain’s cash flow but Atul used his company Collogne Investments, which owned the Sh2 billion property in Nairobi, as Nakumatt’s guarantor to offer the multiple bank loans.
