Tuesday, June 18, 2024

How State almost seized SK Macharia’s assets, Royal Media in 2020

In October 2020, the government got the go-ahead to seize all of media mogul SK. Macharia’s assets, including the Royal Media Services. This was after Macharia lost his appeal against a court judgment declaring him bankrupt over a 34-year debt.

Macharia lost the bitter court fight to bar businessman Livingston Waithaka, the managing director of Ocean Freight Transporters Company Limited, from declaring him bankrupt for failing to refund him Sh. 500,000 in a land deal that fell through. This refund has now ballooned into hundreds of millions.

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According to a report that appeared in the Business Daily, the Attorney-General’s office then issued a bankruptcy receiving order. This allowed the State to take over and supervise Macharia’s business with the aim of settling all his debts.

“The order, placed in Friday’s Kenya Gazette notice, was triggered by last year’s Court of Appeal decision that rejected Mr Macharia and his wife’s opposition to being declared bankrupt over a Sh. 500,000 debt, which has since ballooned to Sh. 293.4 million,” the report said.

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It added that Mark Gakuru, the Official Receiver who is based at the State Law Office, had been identified to supervise Macharia’s businesses. The same notice had been issued for the benefit of all creditors and captures all his debts, all bank loans, suppliers and any other creditors.

The billionaire would lose access to his businesses, bank accounts and property that would be put under the watch of the official receiver. He would also provide Gakuru with a statement of his wealth that includes his assets, debts and liabilities as well as securities held by people he owes money.

“He also risked losing directorship in companies that he and his wife, Purity Gathoni, own, including Royal Media Services – which owns Citizen TV and radio as well as several vernacular radio stations. But Mr Macharia had the option of keeping the Official Receiver at bay by issuing a plan on how he intended to repay all his debts and enter into court-supervised agreements with all the creditors,” the report said.

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According to the report in the daily, Waithaka told the court that he had paid Sh. 500,000 as a deposit to Macharia in the 1980s for a plot in Nairobi’s Industrial Area. This plot was valued at Sh. 2 million back then.

Macharia and his wife acknowledged that they indeed received the half a million shillings deposit. They however maintained that Waithaka still owed them Sh. 1.5 million as the balance for purchase of the plot, off Enterprise Road.

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“They argued that the land deal was botched by Mr Waithaka after he turned down the plot despite paying the Sh. 500,000 deposit. The land was allocated to the Macharias by the State in 1982 and they were expected to pay Sh. 636, 970 for it. They later agreed to sell the property to Mr Waithaka, who declined after its records indicated it was along Biashara Street in Nairobi’s city centre and not Industrial Area, according to court filings,” the report said. However, Macharia returned to court and court an injunction pending the hearing and determination of his appeal.

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