Debts, family fights ruin late Njenga Karume’s Sh. 40 billion empire

[ad_1] Njenga Karume Empire: Were he to arise today, the late renowned billionaire Njenga Karume would be shocked at how fast his once thriving business empire has crumbled. His famed four star hotel situated at Westlands, Nairobi, is currently set to be auctioned. The Guaranty Trust Bank (GT Bank) has put up the hotel for auction to recover a Sh. 257.6 million loan. The hotel has 128 bedrooms and sits on 3.5 acres of prime land. The auction has been set for January 22. The auction, though, will not reflect the true value of the land that the hotel sits on, which is estimated to be in the Sh. 600 million range. The late Karume, a former Defence minister in the then President Mwai Kibaki’s government, died seven years ago, leaving behind multibillion-shilling properties. His wealth was estimated to stand at some Sh. 40 billion. Seven years after his death, his children and trustees have done little to salvage or even triple the wealth as was Karume’s wish. Apparently, at the time of his death, “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,” the Mchipuko News reports. It adds that “in his prime, Karume was the biggest distributor of beer maker East African Breweries Limited’s products, a lucrative, long-term contract that earned him billions of shillings over the years.” The late Karume’s known businesses in the hospitality sector include the Lake Elementaita Lodge in Nakuru, Indian Ocean Beach Resort and Diani Beach at the Coast. In the real estate sector, the empire includes Cianda House Koinange Street, Nairobi, Unity House and many other apartment blocks in Nairobi, Kiambu and Limuru. He also had a stake in at least 46 companies including the Standard Chartered Bank (K), Gracia Limited, Kiambu Sawmills Limited, New Kenya Cooperative Creameries, Kenya Wine Agencies Limited among others. Some of the attempts that the family has made to salvage the falling empire has included disposal of key properties. In year 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 Village Inn Hotel, 25 acres of Land in Elementaita and Kacheliba Tea Estate were some of the businesses that the family sold off. A BD report also says that in 2018, 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 and on the same day moved to secure goods at the hotel to recover the tax. The matter was settled after KRA agreed to a repayment plan of Sh. 50 million in monthly installments and payment of Sh. 7.9 million to auctioneers who had already secured the hotel’s property to recover the tax. In August 2018, Karume’s daughter Jane Mukuhi revealed that the late businessman’s empire owed KRA Sh. 350 million and other creditors Sh. 2.62 billion. The debt problems have been exacerbated by family in-fighting and contests against the empire’s trustees. “His estate has been the subject of a bitter dispute between some of his children and trustees, with some of the disputes spilling to the courts,” says a report in the BD. In September last year, it was revealed that Karume’s granddaughter Michelle Wariara Karume, 25, had died while begging for hospital funds from the trustees. The team of trustees includes George Warieri, Kung’u Gatabaki and Margaret Nduta Kamithi. “My final wishes, I would like you all to take a minute to reflect on my current situation, because it has taken courage, compassion and faith in God to overcome and get through every day. It is with a heavy heart that it has come to this, but I am running out of time here. I kindly would like to know the way forward because it is such a terribly long time since I was on treatment,” wrote Ms Karume on email. “What is the purpose of my grandfather’s wealth if it alone cannot benefit someone as myself when it comes to my healthcare purposes?” [ad_2] Source link