Nakumatt sues firm in rent arrears row

Nakumatt City Hall Branch closed. [PHOTO:WILBERFORCE OKWIRI]

Nakumatt Supermarket has sued its former landlord for withholding its property worth Sh120 million after evicting the retailer from its Diani branch in Kwale County last year.

Nakumatt Director Ankoor Shah, through lawyer D Ngonze, termed the eviction unlawful and punitive and urged the court to order South Coast Holdings Ltd to release the property or pay the said amount.

However, South Coast Holdings said it evicted Nakumatt from its premises over rent arrears amounting to Sh29.5 million.

Mr Ngonze told Justice Ann Amollo the landlord had declined to comply with her earlier order issued on November 15, last year, directing the firm to deposit Sh20 million in an escrow account to be opened by both Nakumatt and the landlord’s advocates, pending the hearing and determination of the suit.

The lawyer said the supermarket had suffered a loss of business to a tune of Sh7 billion as at November 17, 2017 following the standoff.

Nakumatt is also claiming Sh69.3 million in losses from stock and Sh12.5 million for release of staff.

“Nakumatt’s claim is against the landlord’s illegal eviction, damages, loss of movable property, mesne profits from unlawful use of movables, lost business and income,” Ngonze told court.

He said the landlord carried out the eviction despite the court appointing an administrator, Peter Opondo Kahi, who was to meet with all the supermarket’s creditors and forge the way forward on settling outstanding debts.

“If the landlords were to be authorised to immediately re-enter their premises and thus remove Nakumatt therefrom, that is likely to impede the achievement of the purpose of the administrator,” read an order by High Court in Milimani in the insolvency case.

However, in their response, South Coast Holdings Director Sultan Khimji, through lawyer Kinyua Kamunde, said Nakumat owed them Sh29.5 million in rent arrears, service charges cost and repairs, redecoration as well as reinstatement and rent lost from November 2017 to March last year.

He urged the court to order Nakumatt to deposit in court Sh150.8 million in a joint account as security pending determination of the suit.

Nakumatt has faced financial woes, with debts of more than Sh36 billion forcing it to close many branches in Kenya, Uganda and Tanzania within 18 months.

PKF, the administrator who came in to steady the ship after creditors sued to dissolve Nakumatt, has been unable to save Nakumatt, once a big retailer with 64 outlets.

Premium Treasury to unveil luxury gym and spa amid austerity push
Premium State's fuel import deal rattles industry, but no cheap fuel yet
Premium After Goldenberg, Pattni now linked to Zimbabwe gold smuggling syndicate
Premium Why electricity keeps getting more expensive
The Standard
Get unlimited access to The Standard website!