PKF Kenya Says Lenders overcharged Nakumatt To Its Collapse

Several banks overcharged Nakumatt Holdings amounts running into millions of shillings on loans, according to the company’s court-appointed administrator PKF Kenya.

This emerged after the administrator hired consultancy firm Interest Rates Advisory Centre (IRAC) Limited to review how some banks arrived at interest charged on loans issued to the retailer.

Investigations by IRAC has, for instance, noted that United Bank of Africa (UBA) required Nakumatt to pay Sh127 million in interest on the Sh17 million it provided to the supermarket chain.

Nakumatt has since challenged UBA’s claim and the matter is currently before a court.

IRAC is currently reviewing claims by other banks in a move that could see Nakumatt’s liabilities reduce. The collapsed retailer owes lender Sh13.6 billion in loans and interest accrued, according to the latest (2019) financial statement.

“Precisely it has been noted that upon scrutiny and recalculation there was a whopping 127 million difference between the amounts claimed by the UBA and what was actually payable,” the administrator said in a report seen by the Business Daily.

“The company is still in the process of investigating the same from the other banks to ensure that the correct figures are payable, in light of the above, there shall be a great reduction of the liabilities of the company.”

Banks owed by Nakumatt have now identified 11 real estate properties valued Sh3.68 billion that are linked to the retail chain’s former chief executive, Atul Shah and his family, for possible seizure.

The assets include shopping malls, office blocks and prime land in Nairobi, Mombasa and Nakuru — where Atul’s father started Nakumatt as a retail shop. The properties are owned by third parties linked to the Shah family, which owns the bulk of Nakumatt shares.