Saturday, July 2, 2022

High Court bars KCB Bank from acquiring English Point Marina.

Justice Dora Chepkwony of the High Court, has barred KCB Bank Group from advancing with their seizure of the English Point Marina tourist hotel in Mombasa. The preclusion come after the parent real estate firm argued out that the appointment of receiver-manager, Kamal Anatroy Bhatt, in charge of the hotel take over was unjustified and irregular. The Pearl Beach Hotels filed an application regarding the matter, hence bringing the take-over process to a stand-still until the case has been heard in court. The judge ordered the parties to maintain their status quo pending the determination of the filed application.

Nick Ndeda, the lawyer who filed the application on behalf of Pearl Beach Hotels stated that there were no justifications for Mr. Bhatt’s appointment to the receiver-manager position.

On Tuesday 1st June 2022, KCB seized the property over claims that the firm was unable to repay a 5.2 Billion loan, despite the debt having been restructured severally to help the real estate firm repay it. Mr. Ndeda disclosed that KCB had indeed agreed to grant the real estate firm loans between 2011 and 2018 and charged the English Point Marina, as it is also owned by the real estate firm, Pearl Beach Hotels.

“That pending the hearing and the determination of this application, a temporary order if injunction be and is hereby issued restraining the 1st respondent from appointing a receiver or receiver managers, administrators or exercising its power under the debenture,” said Judge Chepkwony.

In addition to this, the lawyer representing Pearl Beach Hotels requested the court to allow the firm’s directors unrestrained access to the Penthouses, D1 and D2 where they had been living.

“That the 2nd respondent had evicted the directors of the applicant from the residential homes which are located on the premises rendering them destitute and denying them their fundamental rights as protected in the constitution,” Nick Ndeda stated.

Mr. Ndeda also filed another motion seeking to block KCB Bank from selling or subdividing any property or any part of the building or development and its assets, pending the determination of the application.  This means that KCB will stop conducting the audit of buyers of the units of the luxury hotel, indefinitely.

KCB seizes luxury property English Point Marina over Sh. 5.2 billion debt (biznakenya.com)

In the Companies Act, it is a requirement that debentures and charge instruments be registered and the real estate firm has done so. Nick Ndeda stated that the firm has been servicing the loan and enjoyed a moratorium that lapsed in June 2020. He further went on to state that Pearl Beach Hotels had managed to pay Kshs. 3.3 Billion out of the Kshs. 5.2 Billion debt.

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