An advertisement in a daily newspaper revealed that the Jacaranda Hotel is set to be auctioned on January 22, 2020. The hotel is part of the vast estate of the late Njenga Karume and is situated in the leafy suburbs of Westlands.
The hotel is one among the many lucrative multi billion properties that have been used by the Njenga Karume Trustees to secure loans from various banks including the cooperative bank as well as the GT bank (alias Guaranty Trust Bank Ltd).
Jacaranda Hotel was used to secure Ksh. 257 million loan from GT Bank. The hotel was scheduled for auction on July 2019 after failing to service the loan in time. However, the auction was put off because the loan had to be restructured after consultations between GT Bank and the trustees of the Njenga Karume Estate.
If indications are to go by, since the loan restructuring agreement, the trustees have never repaid the loan and consequently the bank is demanding its money back.
Through Regent Auctioneers the bank intends to auction the property including all its buildings and a piece of land approximately 3.506 acres on January 22, 2020.
“Duly instructed by our clients, we shall set the under mentioned properties by public auction on Wednesday January 22, 2020 at our auction mart new Kereita building, Kirinyaga Road at 11am,” read part of the auctioneer’s notice. “This is a 128 bed-roomed four-star hotel with ensuite bathrooms, satellite tv, and wireless internet connection situated in the heart of Westlands,” the notice further stated. To bid, interested purchasers are required to place a refundable deposit of KSh 5 million.
A close source informed Mahakamani.news that the beneficiaries of the trust sense malice in notice. The beneficiaries opine that the Bank wants to dispose of the property to avoid a caveat emptor notice that the court may attach to the property if the judgement in Albert Kigera Karume & 2 others v Trustees of the Njenga Karume Trust scheduled for February 2020 finds the trustees liable for mismanagement of the Njenga Karume Estate. Moreover, in the period between July 2019 to December 2019, the beneficiaries also argue that trustees never gave them any notice of auction for the same property.
The beneficiaries further aver that the defaulted loan is far below the estimated valuation of Jacaranda Hotel which is strategically located in one of the most prime locations in Nairobi. This is because a 2019 report by Cytonn Real Estate showed an acre of land in Westlands fetched an average price of KSh. 145 million – meaning the land alone where Jacaranda sits could be well over KSh. 500 million and the combined value could be over the KSh. 1 billion mark.
Njenga Karume, a wealthy businessman and politician, died in 2012, leaving his multi billion estate in the hands of trustees. However, his businesses have over the past 7 years been in the red over succession fights, bad debts, mismanagement, and tax issues with Kenya Revenue Authority.
At the time of his death the late Njenga Karume, was among the wealthiest individuals in Kenya. His vast business empire cut across almost every major economic artery of the country, with multi million investments in agriculture, transport, hospitality and the Nairobi Securities Exchange.
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