The late Cabinet Minister Njenga Karume’s Jacaranda Hotel was on Monday put on auction over a Ksh257.6 million loan owed to Guaranty Trust (GT) Bank
Jacaranda Hotel, the crown jewel of the former powerful defence minister’s vast Sh40 billion empire is set to be sold to the highest bidder amid endless tussles over the empire between its trustees and beneficiaries.
Regent Auctioneers in a notice posted on Monday confirmed the auction for the 128-bedroom four-star hotel sitting on a 3.5-acre piece of land in Westlands will be held on January 22.
“Duly instructed by our clients, we shall sell very prime property at our auction mart…. New Kireita Building, Kirinyaga Road at 11am,” read the notice.
Interested bidders have been advised to deposit Ksh5 million as the tussle to acquire the prime property hots up.
The Ksh257 million that GT is looking to recover is way short of what the current market valuation of the property. If the hotel was to be sold at current rates it would fetch at least Ksh700 million.
Recent reports by two different real estate companies, Cytonn and Hass Consult estimate the price of an acre in Westlands to be well worth Ksh145 million and Ksh200 million respectively.
Attempts to block the hotel’s auction through a court order flopped on Tuesday after the High Court dismissed the suit filed by the trustees with Justice Wilfrida Okwany instead directing them (trustees) to honour their obligations.
The hotel has been in the limelight recently for all the wrong reasons. In 2018, the Kenya Revenue Authority (KRA) swarmed the hotel with auctioneers tasked with recovering tax arrears totaling to Ksh197 million.
However the hotel’s managers came to an amicable agreement with the taxman leaving the hotel with its biggest problem, a raging fight between its owners and the people mandated with implementing the former politician’s wishes.
The late minister’s children Lucy, Albert and Samuel Karume have since their old man’s death held that the trustees their father appointed have mismanaged the properties since Njenga Karume succumbed to cancer in 2012.
However, the trustees- Kung’u Gatabaki, George Waireri and Margaret Nduta in response to the allegation maintain that the beneficiaries are ‘hostile’ and want to take control of the property outside the dictates of their father’s wishes in the absence of a clear will hence throwing the Karume family in chaos.
Besides Jacaranda Hotel, the late Njenga Karume owned considerable stakes in the Kenya Wine Agencies Limited (KWAL), Standard Chartered Bank, New Kenya Cooperative Creameries Limited and a host of other companies.
The former politician had interests in the hospitality sector including owning Lake Elementaita Lodge in Nakuru and Indian Ocean Beach Resort as well as Diani Beach at the Coast.
He also had a flurry of rental residential and commercial blocks that form part of the formerly vast empire which is now crumbling.