Former Nakumatt CEO Atul Shah has lost a bid to overturn the sale of his palatial home in Lavington, Nairobi which fell under the hammer of auctioneers.
It became the latest property sold by KCB Group, which Nakumatt owed Ksh2 billion. By the time the supermarket chain collapsed in January, it had racked up debts amounting to over Ksh30 billion – including Sh18 billion to suppliers, Sh4 billion to commercial paper holders and the rest to banks.
Owing to their financial muscle, banks have been more aggressive in their pursuit of repayment.
While KCB relied on the supermarket chain’s cashflow to issue the loans, Shah also attached some of his personal properties in a bid to speed up advancement of the credit.
He offered the house in Lavington as security in 2011, accounting for Ksh25 million of loans issued to Nakumatt. It was sold by KCB through Leakey Auctioneers earlier in 2021.
KCB had previously sold Shah’s prime property in Nairobi’s Industrial Area to furniture store Furniture Palace International Limited for Ksh1.04 billion – as revealed by court records.
Nakumatt’s court-appointed administrator, Peter Kahi, had fought the auction of the Lavington property claiming the law was not followed. Shah was listed as an interested party.
He insisted that the property was not used as security for the loan, questioned computation of the loan and further claimed that Shah was not issued with a notice of auction.
Justice Francis Tuiyott, however, threw out the application stating it had no chance of success. He further questioned why Shah was on the sidelines in the matter considering he was a substantive party.
“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…
“No good reason has been demonstrated as to why matters which truly belong to his corner (Mr Shah) must be urged by the principal debtor without his participation as a substantive party,” he stated.
Shah has previously maintained that some of the banks which gave Nakumatt loans were only keen on securing his properties, claiming that they were reluctant to back the supermarket chain’s turnaround plan.
Records show that at the time of Nakumatt’s collapse, DTB Bank was owed Sh3.6 billion, Standard Chartered Sh900 million, KCB Sh1.9 billion, Bank of Africa Sh328 million, UBA Sh126 million and GT Bank Sh104 million.
The banks have been looking into several properties and bank accounts linked to Shah as they aim to recover monies owed to them.
The Directorate of Criminal Investigation (DCI) Anti-Banking Fraud unit also announced a prove into Nakumatt over claims of theft and money laundering.