This archive report was first published on 25 August 2020.
Published on August 25, 2020, a court ruling has paved the way for Bank of Africa to auction off the Sh2 billion Nakumatt head office, a move that has sparked a bitter dispute among the supermarket chain's creditors.
The property, valued at Sh2 billion, has been charged to four banks: Bank of Africa, Standard Chartered, KCB, and Diamond Trust Bank. The banks are owed a combined Sh8 billion, but have failed to agree on the sale of the property for over a year.
According to a source familiar with the matter, Standard Chartered has the first charge on the property, while the other banks have a second charge. The property's valuation has been affected by a property slump in recent years, exacerbated by the COVID-19 pandemic.
Nakumatt's Chief Executive Atul Shah used the head office as security to secure loans from multiple banks. In court papers, Shah attempted to block the sale by Bank of Africa, arguing that other creditors would lose their security.
The property, which has a 99-year leasehold, offers an annual rent of Sh220,000. It features an administration office block, a football pitch, tennis court, and parking bays, as well as warehouses, a meeting block, call centre block, and a garage.
With Nakumatt's liquidation in January, creditors, including landlords, banks, and suppliers, voted to liquidate the company, leaving behind a Sh38 billion debt. Secured creditors, such as banks, have been seeking to recover their money by seizing properties linked to Shah and owned by third parties.
