The High Court has stopped the Kenya Commercial Bank (KCB) from seizing the luxurious English Point Marina Hotel in Mombasa over a debt amounting to Sh4.8 billion.
Justice Dorah Chepkwony issued the restraining order on Wednesday pending the hearing and determination of a petition filed by the five-star hotel.
The judge barred the lender from appointing a receiver or receiver managers, administrators, or exercising its power under the said debt.
KCB had appointed Kamal Anatroy Bhatt as the receiver-manager, with the intention of selling part or the entire property in a bid to raise enough funds to settle the debt. The luxury property is located by the harbor and consists of 96 apartments, eight penthouses, and a 26-room hotel.
The hotel’s proprietor Pearl Beach Hotels moved to court claiming that the appointment of the receiver-manager was premature, misconceived, and calculated to defeat the right of redemption.
The hotel accuses KCB of irregularly, unprocedurally, and illegally appointing a receiver-manager without due notice and with a complete lack of justification under the debenture instruments.
Their lawyer Nick Ndeda told the court that the hotel’s directors Nazir Jinnah and Alnoor Kanji, who permanently reside in Penthouses D1 and D2 on the premises with their families, have been denied access by the appointed receiver.
Pearl Beach Hotels claims it has been in continuous discussions with the bank with a view of resolving an accounting error on the part of the lender resulting in a surplus charge of Sh893,786,194 which has rendered computation of the loan amortization schedule impossible.
The hotel admits that KCB bank advanced credit facilities of Sh4.8 billion in various loan agreements for construction.
“The facilities were secured inter alia by charges over all the property known as subdivision no.6628/1/MN English point Mombasa,” reads court documents.
The matter has been certified as urgent.
