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.
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.
According to reports Mr.shah acquired billions in loans from several banks using his company, Collogne investments, in a bid to save the Nakumatt from the financial crisis.
The bank was also authorized to issue a notice to other lenders prior to the auction process. Nakumatt and Collogne investments had admitted to defaulting on the loan thus the judge ruled that the bank was free to auction the property.
However, previous court orders revealed that another local bank had been given a go-ahead to conduct the auction. The bank had already entered into a sale deal for the property to a third party for Ksh1.04 billion leading to a Ksh1 billion loss.
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.
Nakumatt was shut down in January 2020 with Ksh30 billion accrued debt, Ksh18 billion were owed to suppliers with commercial institutions and banks demanding the remaining balance.
The supermarket is said to have procured the loans between 2013 and 2015 after it fell into a financial crisis.