The auction of a multibillion-dollar property on Nairobi’s Riverside Drive, where the famous DusitD2 hotel is located, has been postponed pending the outcome of an appeal filed by I&M bank, which claims the property owners owe it Sh2.82 billion.
The property was put up for sale in January due to an Sh5 billion debt owed to the owners, Cape Holdings ltd and Synergy Industrial Credit, as a result of a botched sale deal.
In a report by the Business Daily, the lender filed a lawsuit in court, claiming that the property would be sold, making it impossible for the bank to recover its debt.
“The charged property has yet to be sold, according to the record.” “However, unless an order of stay of execution is granted, the first respondent (Synergy) will proceed to execute against the sole property of the second respondent (Cape Holdings),” Justices Daniel Musinga, Wanjiru Karanja, and Agnes Murgor said.
The judges stated that auctioning the property would render the appeal moot. “As a result, an order of stay of execution is merited in the interest of preserving the charged property within the remit of this Court until the appeal is heard and determined,” the Judges added.
According to the bank’s lawyer, William Kabaiku, the High Court approved the sale of the company’s sole asset without allowing the administrator to prepare a proposal for creditors to consider.
According to him, the judge failed to consider the administrative processes required for the execution of a decree, as well as the legitimate interests of the property owners’ creditors and the need to preserve the assets so that they can be maintained as a going concern.
Mr Kabaiku believes the court should decide who has priority over the property: a secured creditor or a person with a court order.
Synergy’s Senior Counsel Ahmednasir Abdullahi opposed the appeal, claiming that the bank was not a party to the High Court proceedings.
He also claimed that the case had already been decided by the High Court and that the appeal was an attempt to reopen the case.
After Cape Holdings ltd lost an 11-year court battle with Synergy Industrial Credit, which is demanding Sh4.2 billion plus interest for a botched sale deal, Moran Auctioneers put the property up for sale.
The 14 Riverside Drive property, located near the University of Nairobi’s Chiromo Campus, is made up of five office buildings, a five-star hotel (Dusit D2) with a swimming pool, a parking silo, a food court, and a cafeteria.
A bar, restaurant, library, meeting rooms, and a gym are among the hotel’s amenities, which also include a spa, swimming pool, and an open-air restaurant. With an additional 34 parking bays, the parking silo can accommodate 625 vehicles.
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