Late City Tycoon's Hotel on Sale Over Ksh257M Loan

The empire of politician and business mogul the late Njenga Karume is set to suffer another major blow as one of their major assets has been put on auction.

Jacaranda Hotel, that is located in Westlands, Nairobi, has been put on sale by the Guaranty Trust Bank over a Ksh257.6 million loan.

Karume, a former minister for defence, died seven years ago leaving behind multi-billion shilling properties.

However, the former Kiambaa MP had also accrued huge loans that his family and board of trustees appointed to run his estate struggled to clear.

Reports by Business Daily indicated that the bank had contracted auctioneers who had already contacted the hotel's management over the impending auction.

"We have been advised by our client, Guaranty Trust Bank Ltd, that you are still in arrears amounting to Ksh257,645,708.53 as at 5th July 2019. We have set the auction date as 21st July 2019 at our auction mart new Kireita building, Kirinyaga Road, at 11.00am.

If you wish to stop the auction, you will have to pay all the debt due together with the interest and costs incidental thereto," the auctioneers notified the hotel.

The auction notice comes after the Kenya Revenue Authority (KRA) in 2018 lined up auctioneers to recover value-added tax (VAT) and Pay as You Earn (PAYE) arrears amounting to Ksh153 million owed by the hotel.

The taxman issued the Jacaranda Hotels Limited with an enforcement notice on January 12, 2018, seeking immediate payment of tax arrears amounting to Ksh197 million.

On the same day, KRA moved to secure goods at the hotel in a bid to recover the tax owed.

The matter was however settled after the taxman agreed to a repayment plan of Ksh50 million monthly installments, and a payoff of Ksh7.9 million to auctioneers who had already secured the hotel’s property to recover the tax.

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