Nakumatt’s founder to appear in court in Sh74m contempt case

Atul Shah, the founder and former managing director of troubled Nakumatt Holdings, has been ordered to appear in court to show cause why he should not be committed to civil jail.

The case arose from the supermarket’s failure to pay Sh74.4 million to its former landlord at City Mall, Mombasa.

Environment and Land Court Deputy Registrar Christine Ogweno said she could not find any justifiable reason why execution of the decree of the court should not be issued against Mr Shah.

“The decree issued on March 6, 2018 remains unrealised, the second defendant (Mr Shah) has failed to show cause why execution should not be issued against him,” said Ms Ogweno.

She added that Mr Shah ought to appear in court on February 6 to show cause why he should not be committed to civil jail for up to six months for failing to satisfy the decree.

According to suit papers, Mr Shah is expected to pay Sh74.4 million being the decree comprising rent and interest accrued up to the time the retail chain was evicted from the premises.

In his response to the notice to show cause, Mr Shah stated that he had filed an appeal before the Supreme Court which was admitted in December and that he also filed an application for stay of execution of the decree.

The Deputy Registrar said Mr Shah failed to demonstrate how an insolvency case against Nakumatt is grounds not to allow the notice to show cause against him.

Ideal Locations Ltd, a former landlord to the troubled retail chain sought issuance of a notice to show cause against Mr Shah.

The retailer lost Sh200 million during its eviction from the Nyali mall that saw auctioneers cart away goods, adding to its financial burden.

Nakumatt creditors last month voted to liuquidate the once giant retailer after a recovery plan failed to bear fruit. This means they will share the proceeds from the sale the few assets it has on its books after which the retailer will formally cease to exist.