Atul Shah, the former chief executive of ousted retail giant Nakumatt, is set to lose his lavish home in a public auction for a bunch of store debt.
According to the details, Mr Shah will lose his Lavington home to auctioneers this month after defaulting on a KCB loan of U $ 1,8407,731 he had guaranteed to the supermarket.
“We will sell it at public auction on August 24. We are looking at Shs 30 million,” a representative from Phillips International Auctioneers said on Monday.
The bank, through Phillips International Auctioneers, will sell the four-bedroom villa with a servant’s quarters when the auctioneer’s hammer falls on August 24.
Mr. Shah, as Nakumatt’s guarantor, had used the property as additional collateral to provide convenience for multiple bank loans.
KCB previously sold Mr. Shah’s main property in the Nairobi industrial zone to Furniture Palace International Ltd for 1.04 billion shillings, according to court records.
Lavington’s house was offered as collateral in 2011 and accounted for 25 million shillings in multibillion shillings loans.
The sale of personal property marks a new low for Mr. Shah, who for decades occupied the regional retail corner office.
This prompted global institutions like the Financial Times to name the former CEO of Nakumatt as one of the 50 most influential businessmen in the world, alongside Equity Bank’s James Mwangi and Nigerian top industrialist Aliko Dangote. .
After the collapse of the Nakumatt Empire, the 59-year-old entrepreneur preferred to stay away from the media.
Nakumatt, which has grown from a mattress store in a rural town to branches in Kenya and East Africa, was forced to close last year as it struggled to reimburse its suppliers, owners and others creditors.
Banks owed billions of shillings by the collapsed retailer are fighting over Mr. Shah’s personal assets to collect overdue loans.
As the banks advanced billions of shillings to Nakumatt on the strength of the retail chain’s cash flow, Mr. Shah also offered his personal assets as collateral for quick loan disbursements.
Nakumatt closed its doors in January of last year with debts estimated at 30 billion shillings, of which 18 billion shillings to suppliers, 4 billion shillings to commercial paper holders and the remainder to banks, which are more aggressive in pursuing their unpaid loans.
Regulatory documents indicate that Nakumatt owed DTB Bank Sh3.6 billion, Standard Chartered Sh900 million, KCB Sh1.9 billion, Bank of Africa Sh328 million, UBA Sh126 million and GT Bank Sh104 million.
Mr Shah said in court documents that some lenders offered loans to Nakumatt while keeping an eye on his properties and that banks were reluctant to back his bailout.
Creditors of the supermarket chain voted to liquidate it after it failed to pay off debts following an unsuccessful bailout attempt.
After the vote, banks began to identify properties and bank accounts linked to Mr. Shah, especially outside Kenya.
Local assets include prime malls, office buildings and land in Nairobi, Mombasa and Nakuru – where Atul’s father started Nakumatt as a retail store.
The properties are owned by third parties linked to the Shah family, who own the bulk of Nakumatt’s shares, according to a document prepared by the court-appointed administrator of the retail chain.
The Anti-Bank Fraud Unit of the Criminal Investigations Directorate is also investigating Nakumatt for suspected theft and money laundering.
How the former CEO of Nakumat cheated the banks