Tycoon Munga’s Sh400m estate put up for auctionFriday October 13 2017
Nairobi auctioneers yesterday placed billionaire businessman Peter Munga’s Sh400 million estate up for sale, citing his failure to settle an unspecified amount of money owed to a bank.
Galaxy Auctioneers, in a notice published in the local dailies, invited those interested in buying Mr Munga’s five units of four-bedroom maisonettes in Kasarani’s Stone Groove Estate to be present at an auction event to be held at the end of this month.
“Duly instructed by the chargee, we shall sell the under-mentioned property by public auction ... The properties are registered in the name of Peter Kahara Munga,” the auctioneer said in the notice.
But Mr Munga, through an aide, said he intends to settle the debt on Monday.
“The decision to auction the properties arose from Mr Munga’s decision to guarantee a friend,” said John Gitogo, the finance director of the billionaire’s Equatorial Nut Processors Limited.
“The amount owed is about Sh25 million and will be paid on Monday. Thereafter we shall recover the money from our friend,” he said, adding that Jamii Bora Bank is the creditor seeking to recover its cash.
Jamii Bora’s CEO, Sam Kimani, had not responded to our queries by the time of going to press.
Mr Gitogo said the houses have a far higher value than the debt, estimating each of the houses to be worth Sh80 million.
Galaxy said in the notice that each house sits on 0.02 acres and has a detached servant quarters.
The auctioneer said bidders would be required to pay a refundable deposit of Sh500,000 to participate in the auction.
This is the latest in the many battles Mr Munga has fought with creditors — most of them involving his friends and private firms in which he is the controlling shareholder.
Though some of the disputes have been seen to question Mr Munga’s ability to settle debt, the businessman insists he is fending off attempts by dishonest parties to shake him down.
This is because his stake in insurance group Britam #ticker:BRIT alone, for instance, has a market value of more than Sh10 billion — meaning he could easily liquidate part of this wealth to settle debts.
The wrangles are particularly sensitive for the businessman given his links with financial services companies that rely on public trust.
Mr Munga has directorships at Britam, HF Group #ticker:HFCK and Equity Group #ticker:EQTY – the country’s second-largest bank where he was an early shareholder.
Among the outstanding disputes is a Sh150 million claim by Joseph Muturi Kamau, a friend of the businessman.
Mr Kamau claims he deposited three million shares in a holding account at Equity Bank as security for a Sh40 million loan he took from the lender but in 2011 struck a deal to sell the shares to Mr Munga at a price of Sh50 each.
Mr Munga, however, accuses Mr Kamau of dumping the shares on him, aware that TransCentury #ticker:TCL was a shaky firm whose stock would subsequently collapse.
READ: Munga fights to stop former partner’s Sh150m debt suit
ALSO READ: Munga’s Sh90m offer to settle Equity shares dispute rejected
The investment firm’s shares traded at Sh6.4 yesterday, an 87 per cent drop from the price of Sh50 when the company went public in July 2011.
The stock rout came on the back of losses and a dilutive entry by private equity firm Kuramo Capital, which provided Sh2 billion to help it pay bondholders last year.
Mr Munga recently offered to pay Mr Kamau Sh90 million but the proposal was rejected, with the latter demanding full payment of the Sh150 million.
A Mauritian private equity firm has asked the courts to declare Mr Munga bankrupt after he allegedly defaulted on a Sh60.7 million loan.
Mr Munga argued in court that African Seed Investment Fund LLC should instead pursue Freshco Limited — a company he fully owns — but the court lifted the corporate veil and allowed the creditor to launch the bankruptcy case against the businessman.
The billionaire also said that the PE firm had overstated its claims, adding that the bankruptcy petition was only aimed at embarrassing and arm-twisting him into paying the disputed debt.
READ: Munga fails to stop Mauritian lender’s bankruptcy suit
ALSO READ: Munga enters out-of-court talks over Sh150m loan row