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Court stops sale of Sh500m KFA headquarters

COUNTIES
By Karanja Njoroge | August 12th 2015

NAKURU: The Kenya Farmers Association has obtained temporary court orders stopping the sale of its Nakuru town headquarters, which was scheduled for tomorrow.

Nakuru Environment and Lands Court Judge Munyao Sila restrained Barclays Bank of Kenya and Garam Investments from auctioning the Sh500 million prime building.

"It is hereby ordered that the intended sale of the property Nakuru Municipality/Block/9/33 scheduled for August 13, 2015 is hereby stayed pending inter parties hearing," the order stated.

The inter parties hearing will be on October 8. The planned auction had sent shockwaves among large-scale farmers in the country who considered it a major setback to farming.

The order was issued after the sale of the property was advertised in a local daily for the second time Tuesday, despite the KFA management claiming they had entered into an agreement with the bank to stop the sale. The bank intended to sell the building through a public auction to recover a Sh90 million loan.

Shareholders and farmers last week appealed to the President to save the building as it is only one of the few remaining assets the organisation owns. At its peak, KFA had assets spread out in major towns before it started experiencing financial problems with most of its property held as collateral for loans by banks.

"KFA was the farmers' supermarket before years of mismanagement and corruption brought it to its knees and efforts to revive it have been frustrated in the past," said Kings Maina, a KFA delegate.

Outraged by the planned auction, members have demanded a special general meeting, saying most of the decisions taken over the last 13 years were done without its 50,000 shareholders being consulted.

KFA Director Kipkorir Menjo, however, blamed the Lands ministry for the slow pace in renewal of leases and provision of titles for assets that would have been used in settling the bank's debt. He said some of the parcels could be disposed and proceeds used to repay the loan.

"Earlier in the year, we jointly agreed with Barclays Bank after a series of meetings to sell non-core assets such as plots instead of stores and go-downs and as an institution we have been committed to repaying the remaining amount, the deadlock solely lies with the Ministry of Lands and the bank is aware," he said.

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