Real estate tycoons battle contractor in wind up suit

Nairobi’s real estate moguls Peter and Susan Muraya have been dragged into a legal battle after a contractor filed a high-profile petition in court seeking to wind up two real estate companies associated with the couple over non-payment of debt.

Eternal Foundation Construction wants the Murayas’ two companies, one of which holds a vast real estate property valued at more than Sh1 billion, liquidated.

Sucasa and Encasa West Limited, the two companies at the centre of the liquidation suit, are owned by the Murayas, whose vast real estate empire is valued at billions of shillings.

This is the latest in a series of high-profile real estate disputes to go to court in what is being seen as reflecting the difficulty property developers are facing on the sales front.

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Robust growth

Kenya’s economy has grown robustly at an average of five per cent per annum in the past four years but that growth has been overshadowed by a steady fall in corporate profits, a stagnation in workers’ incomes and a series of employee retrenchments that have slowed down the sale of new housing units.    
Nairobi auctioneers last month put on sale a Sh1.19 billion residential estate in upmarket Kitisuru estate citing the developers’ failure to settle a bank loan.

Eternal Foundation Construction, the petitioners in the latest case, wants Sucasa and Encasa West, which are associated with the Suraya Property Group, liquidated over a Sh53 million debt and an undisclosed amount in debt respectively.

Through Ochieng, Onyango, Kibet and Ohaga Advocates, Eternal Foundation Construction claims that Sucasa is unable to pay the Sh53 million that was due to it at the beginning of October 2017.

“As at October 2, 2017 the company was justly and truly indebted to the petitioner (and remains indebted) in the aggregate sum of Sh53,044,729 being the amount due to the petitioner pursuant to the practical completion certificate issued on August 22, 2016 as well as the final account rendered on August 31, 2016 upon the petitioner partially completing construction of 1087 units on plot L.R NO 202882 Mlolongo-Mavoko,” Eternal Foundation Construction says in court documents.

Top on the list of prayers Eternal has filed in court is the request for orders to liquidate Sucasa.

The contractor wants the court to appoint a receiver or liquidator for the company as part of the effort to recover the debt – having served the firm with a winding-up notice on October 9, 2017.

Three weeks notice

Eternal Foundation Construction in the notice gave Sucasa three weeks to settle the debt or face a winding-up petition.

Sucasa is yet to respond to the February 27 petition and Eternal Foundation Construction has not provided the details of the work done. The case is set for mention on May 25, 2018.

Peter Muraya, the chief executive of Suraya Property Group, did not respond to queries on the matter.  

Suraya Property Group describes Encasa as “the starter home for first-time home buyers.”

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“Encasa brings a complete lifestyle development in Mombasa Road area. The development is located off Mombasa Road, behind Mlolongo. It occupies a total of 12.5 acres and will have a total of 625 apartments,” it says.

“The apartments are located in 14 courtyards with each having two or three blocks of apartments. Each block has five storeys.”

The project houses are priced at between Sh1.15 million for a bedsitter and Sh3.6 million for a two-bed room en-suite, valuing the entire 625 units at about Sh1.5 billion.