This archive report was first published on 7 January 2020.
January 7, 2020 - The Guaranty Trust Bank (GT Bank) has put up the Jacaranda Hotel, a four-star hotel in Westlands, Nairobi, for auction to recover a Sh. 257.6 million loan.
The hotel, which has 128 bedrooms and sits on 3.5 acres of prime land, is expected to be auctioned on January 22. However, the auction will not reflect the true value of the land, which is estimated to be in the Sh. 600 million range.
Njenga Karume, a former Defence minister in the then President Mwai Kibaki's government, died seven years ago, leaving behind a multibillion-shilling empire. His wealth was estimated to stand at some Sh. 40 billion.
According to a report by the Business Daily, Karume accumulated a debt load that his family and a board of trustees he appointed to oversee his estate have struggled to clear. A vicious fight for the control of the business empire pitting the tycoon's children and the trustees has also derailed the estate.
Some of the attempts that the family has made to salvage the falling empire include the disposal of key properties. In 2018, Karume's family was forced to sell a 17 per cent stake in the business to raise Sh. 2.975 billion to pay debts.
The Kenya Revenue Authority had also lined up auctioneers to recover value added tax (VAT) and pay as you earn (PAYE) arrears amounting to Sh. 153 million owed by the hotel. The taxman issued Jacaranda Hotels Limited with an enforcement notice on January 12, 2018, seeking immediate payment of tax arrears amounting to Sh. 197 million.
