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Court stops auction of Dusit D2 complex following I&M Bank application

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Court stops auction of Dusit D2 complex following I&M Bank application


Dusit D2 complex. NMG PHOTO

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Summary

  • The Court of Appeal has stopped the planned auction of a multi-billion property in Nairobi’s Riverside Drive where the famous Dusit D2 hotel stands.
  • The property had been advertised for sale early this month, over a debt of Sh5 billion. 
  • A bench of three judges put on hold the sale of the building Wednesday following an application by I&M Bank and an administrator appointed by the lender, saying the owners of the building owe them $25 million (Sh2.82 billion).

The Court of Appeal has stopped the planned auction of a multi-billion property in Nairobi’s Riverside Drive where the famous Dusit D2 hotel stands.

The property had been advertised for sale early this month, over a debt of Sh5 billion. 

A bench of three judges put on hold the sale of the building Wednesday following an application by I&M Bank and an administrator appointed by the lender, saying the owners of the building owe them $25 million (Sh2.82 billion).

The lender had placed a notice in October last year appointing Vruti Shantilal Shah as the administrator.

Moran Auctioneers had put up for sale the property after Cape Holdings Ltd, the owner of the property, failed to pay Synergy Industrial Credit Sh4.2 billion plus interest after losing an 11-year- court battle. 

The property known as 14 Riverside Drive near University of Nairobi’s Chiromo Campus sits on a 5.2 acre parcel of land and comprising of five office blocks, a five-star hotel (Dusit D2) with a swimming pool, a parking silo, food court, and cafeteria. 

The lender had challenged the planned sale saying the company was placed under administration. 

But Justice Alfred Mabeya dismissed the bank’s application saying the lender would not suffer prejudice because it has other securities whereas stopping the sale would subject Synergy to irreparable loss, since its bid to recover the money would be delayed. 

“The court has considered the foregoing and the fact that it has not been shown that the amount to be realized from the sale of the suit property would not be enough to offset both the decretal amount and a substantial amount part thereof remain for the bank,” Justice Mabeya said.

But the lender and the administrator moved to the Court of Appeal and convinced the court to stop the auction, pending the hearing of its appeal. Justices Daniel Musinga, Wanjiru Karanja and Agnes Murgor put on hold the auction pending a ruling on March 18.

The office blocks for sale each comprise of ground floor to six floors. The ground floors have banking halls, shops, while the hotel has seven floors with 101 rooms and suites. 

The hotel has a bar, restaurant, library, meeting rooms, and a gym and amenities including a spa, swimming pool, and an open-air restaurant. The parking silo can accommodate 625 vehicles with an additional 34 parking bays.

An advertisement put in the newspaper yesterday stated that the property will be sold either as a whole or based on blocks or offices to single or multiple buyers. 

“Bidders must place a deposit of Sh5 million and must pay 25 percent of the purchase price at the fall of the hammer and the balance should be cleared within 60 days,” the advertisement read. 
 



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