Auctioneers have sold former Nakumatt CEO Atul Shah’s Lavington home over a Ksh2 billion debt owed to a local bank.
This was after his petition to overrule the sale was dismissed by the High court. According to Justice Francis Tuiyott, the petition did not stand a chance.
“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,” ruled the judge.
Leakey Auctioneers sold the property that Shah had placed as supplementary security as Nakumatts guarantor to cushion it against the multiple bank loans.
File photo of now-defunct Nakumatt outlet.
This is the second asset he is losing to auctioneers over accrued debt. Earlier this year, his prime property at Industrial Area, Nairobi was sold for Ksh1.04 billion.
High Court Judge Alfred Mabeya had directed a regional bank to auction the Ksh2 billion property located along Industrial area, Nairobi County to recover a loan advanced by the bank to the fallen retailer.
Reports indicate that Shah had used his company, Collogne investments, to secure loans worth billions from various banks with an aim to save the supermarket from financial woes.
The judge also ordered the bank to issue a notice to other lenders before carrying out the auction process. He argued that the bank was free to auction the property since Nakumatt and Collogne investments had admitted to defaulting on the loan.
However, previous court orders showed that another local bank had been given the green light to carry out the auction. Past reports indicate that the bank had already entered into a sale deal for the property to a third party for Ksh1.04 billion making a loss of Ksh1 billion.
Judge Mabeya on November 2020, had ordered the first bank to auction the property after Shah withdrew a case he had filed to save the property.
Shah’s woes came into light after Nakumatt closed its doors in January 2020 with debt topping Ksh30 billion, Ksh18 billion of which were owed to suppliers with commercial institutions and banks demanding the balance of the debt.
The supermarket is said to have secured the loans between 2013 and 2015 after it fell into financial woes.