A company seeking Sh5.5 billion from the owners of property on Nairobi’s Riverside Drive, where the famous DusitD2 hotel stands, has protested the move to suspend the planned auction of the multi-billion-shilling asset.
A bench of three judges put on hold the planned auction after I&M Bank argued that the property is charged to the bank over a loan of Sh2.82 billion.
The property had been advertised for sale in January, over a debt of Sh5 billion, which arose from a botched sale deal between Cape Holdings Ltd and Synergy Industrial Credit.
A company seeking Sh5.5 billion from the owners of property on Nairobi’s Riverside Drive, where the famous DusitD2 hotel stands, has protested the move to suspend the planned auction of the multi-billion-shilling asset.
Synergy Industrial Credit ltd says in a case filed under a certificate of urgency that it was discriminated against by the Court of Appeal when it suspended the auction in April.
A bench of three judges put on hold the planned auction after I&M Bank #ticker:IMH argued that the property is charged to the bank over a loan of Sh2.82 billion. According to the Bank, the court should determine who should be given priority over the property, as both are owed by Cape Holdings- the owner of the property.
Synergy, however, faults the court saying the order stopped any form by the company to recover the amount, which continues to attract the interest of Sh85 million every month.
“The orders sought and granted by the court in the said ruling were too wide in scope. It is a blanket as it is sweeping in scope and tenor,” the company said through senior counsel Ahmednasir Abdullahi.
Mr Abdullahi said while suspending the auction, the court departed from its normal procedure because I&M had no legal right to seek the order.
“The court in a uniquely and very unusual manner gave a stay order to the 1st respondent, I&M bank ltd, not for its benefit but for the benefit of the 2nd respondent (Cape Holdings Ltd),” he said.
The property had been advertised for sale in January, over a debt of Sh5 billion, which arose from a botched sale deal between Cape Holdings Ltd and Synergy Industrial Credit.
The lender moved to court saying it might be impossible to recover its debt, once the property is sold. “The record discloses that the charged property is yet to be sold.
But, unless an order of stay of execution is granted, the first respondent (Synergy) will proceed to execute against the 2nd respondent’s (Cape Holdings) sole property,” said Justices Daniel Musinga, Wanjiru Karanja and Agnes Murgor.
The property known as 14 Riverside Drive sits on a 5.2-acre parcel of land and comprises five office blocks, and a five-star hotel (Dusit D2) with a swimming pool, a parking silo, a food court, and a cafeteria.
Cape Holdings has been embroiled in a dispute since 2010 over a botched sale deal with Synergy saying it paid Sh750 million to acquire part of the apartments but the deal fell through and the matter was referred to an arbitrator.
