Politics and policy
Akamba assets auctioned to recover Sh168m debt
Posted Wednesday, June 6 2012 at 19:11
One of the assets of the fallen Akamba Public Road Services has been auctioned by the Kenya Commercial Bank (KCB) over a Sh168 million loan.
The property in Nairobi’s Industrial Area, which used to house the bus company’s storage and workshop sheds, was sold two weeks ago in a public auction to Nails & Steel Products Company Ltd for Sh130 million.
The 60-year-old public transport operator had borrowed Sh168 million from KCB in 1992 and charged the property LR 209/4225 to secure the loan.
But after the company failed to service the loan, the bank moved to court seeking to dispose of the land and recoup its money.
Akamba and KCB had agreed to sell the property by private treaty but Commercial Court judge Eric Ogola allowed the bank to auction the property on May 23 after the parties failed to agree on the terms of sale.
Thereafter, the bank informed the court that a valid memorandum of sale had been executed by the Nails & Steel Company after paying a deposit of Sh32 million and undertaking to settle the balance within two months.
Another creditor Treadsetters Tyres Ltd has moved to court seeking orders for a receiver to be appointed to run company over a debt of Sh40 million for services rendered.
The tyre firm is inviting other creditors to join it and have the company run by their appointed executives.
Akamba’s fortunes have tumbled with endless boardroom wrangles and falling out with creditors culminating in the withdrawal of its buses from all routes.
The Commercial Court will hear a petition for the winding up of the company on June 26.
Akamba directors resolved in an extraordinary meeting held on May 21 to sell part of their property to settle the debts and finance a turnaround.
The directors include company chairman Karim Nathoo, director Boaz Nathoo and main shareholders Peter Kamba, Martin Malinda, Richard Mangeli and Kioko Musau.
On May 11, Mr Justice Mutava threw out an application filed by some of the directors to declare the bus company bankrupt.
Karim Amirali Abbany, a step-brother of the company’s chief executive officer, Karim Sherali Nathoo, had teamed up with 13 other shareholders seeking to wind up the transport firm. They accused majority shareholders of mismanagement and embezzlement of funds.