Court allows auction of Dusit D2 property over Sh5 billion debt
Business
By
Nancy Gitonga
| Jul 15, 2024
The owner of the multi-billion property in Nairobi's 14 Riverside Drive where the famous Dusit D2 hotel stands has suffered a major blow after the Court of Appeal has allowed the sale of the premises.
The property is set to be auctioned over a Sh5 billion debt in a long-running dispute with Synergy Limited which owns the building. The debt has been outstanding since 2010.
A judgment delivered on Friday by Justices Patrick Kiage, Lydia Achode, and Paul Mwaniki Gachoka okayed the sale of the prime property after dismissing an appeal by I&M Bank and an administrator appointed by the lender.
"Civil Appeal No. E758 of 2021 and Civil Appeal No. 788 of 2021 are hereby dismissed with costs to the first respondent( Synergy Industrial Credit Limited)," Justice Kiage ordered.
The appellant court dismissed the bank's application saying stopping the sale would subject Synergy to irreparable loss since its bid to recover the money would be delayed.
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The same court had previously come to the same conclusion when Justice Kathurima M'Inoti and Fatuma Sichale ruled that the review application by Cape was moot.
The Court ruled the placing of Cape Holdings under administration by the lender was a well-calculated move resorted to by the bank "in thinly veiled collusion as one last ditch attempt to aid Cape Holdings in its spirited quest to evade execution of the long-outstanding decree, once all room for legal stratagems had been exhausted."
Justice Kiage noted that the administration was activated under the most suspicious timing -immediately the Supreme Court dismissed yet another appeal and placed "the final nail on the coffin of legal manoeuvring".
The judge said the bank took the drastic action against a company that was not in default and whose accounts clearly indicated that it was so solvent that rental income exceeded monthly loan repayments and the bank was aware that the company used its surplus funds for construction of their personal properties.