Nakumatt Atul Shah: Disgraced former Nakumatt chief executive officer Atul Shah Sh. 2 billion assets have been put up for auction. The property has been seized by the Bank of Africa after Atul failed to stop the auction bid at the High Court.
The property which is registered under the name Collogne Investments will be auctioned on August 24 to recover Sh. 700 million that Mr. Shah had borrowed. Collogne Investments is a company owned by Shah.
“Bearing what is before me I am of the view that the plaintiff has failed to demonstrate that its appeal is not frivolous and I do find that the defendant bank stands to suffer greater hardship if an injunction is granted since the debt is not being serviced,” the High Court’s Justice Mary Kasango ruled.
How Nakumatt directors ‘stole’ Sh. 1 billion from ailing retailer
Nakumatt formally shut down in January this year. It collapsed with debts that are estimated to be worth Sh. 30 billion. This included Sh. 18 billion debt Nakumatt owes suppliers, Sh. 4 billion owed to commercial paper holders, and Sh. 8 billion owed to banks. The banks have been targeting Shah’s Sh. 3.68 billion assets as they seek to recover. Among these assets are shopping malls, office blocks and prime land in Nairobi, Mombasa and Nakuru.
Nakumatt directors played a major role in the collapse of the once famous and revered retailer. An audit report for the year ended February 2018 by Parker Randall Eastern Africa showed that Nakumatt top management took more than Sh. 1 billion soft loans directly from the retailer by the time it was placed under administration on January 22, 2018. These loans were all interest free.
“Significant in this net balance is Sh. 948 million due from the directors. These receivables are not supportable based on the available evidence. The amounts due from a director are interest free. They relate to short-term advances through a current account,” the audit report said.
Shah was among those suspected to have taken the loans as he was among the two individuals listed as directors of the company by the report. Apparently, he wrote off stock worth Sh. 18 billion in May 2018 before the company collapsed. Shah and his son, Ankoor Shah, were also accused of accessing and failing to refund interest-free loans amounting to Sh. 1 billion from the retail chain at a time when the stores were struggling to repay its suppliers, landlords and other creditors. Nakumatt Atul Shah.
