Njenga Karume's Jacaranda Hotel in Nairobi to be Auctioned This Month over Unpaid Loan

Popular Jacaranda Hotel in Nairobi’s Westlands area is set to be auctioned later this month over a defaulted loan amounting to over KSh250 million.

The high-end hotel, owned by the family of the late powerful Kenyan cabinet minister and politician Njenga Karume, owes Guaranty Trust Bank (GTB) KSh257.6 million. The facility, valued at more than KSh1 billion, is set to be auctioned on January 22nd, 2020, according to a notice published by Regent Auctioneers.

“Duly instructed by our clients, we shall set the under mentioned properties by public auction on Wednesday 22nd, 2020 at our auction mart new Kireita building, Kirinyaga Road at 11 am. This is a 128 bedroomed four-star hotel with en suite bathrooms, satellite TV, and wireless internet connection situated in the heart of Westlands,” read the notice in part.

The notice states that interested bidders are expected to make a deposit of KSh5 million that is refundable.

The hotel’s auction was first announced about six months ago by Regent Auctioneers over the unpaid loan. In a notice dated July 2019, the auctioning company indicated that any interested party wishing to stop the auction should be able to clear the outstanding amount together with the interests accrued.

“We have been advised by our client, Guaranty Trust Bank Ltd, that you are still in arrears amounting to Ksh257,645,708.53 as of 5th July 2019. If you wish to stop the auction, you will have to pay all the debt due together with the interest and costs incidental thereto,’ read the notice.

In 2018, the four-star hotel also faced auction following accumulated VAT and Pay As You Earn (PAYE) arrears amounting to KSh153 million owed to Kenya Revenue Authority (KRA). KRA had already seized equipment belonging to the hotel but the tax dispute was settled after an agreement was reached to have the hotel pay the arrears in KSh50 million monthly installments.

Karume, a multi-billionaire, passed away in 2012, leaving his multi-billion-shilling estate in the hands of trustees. But the estate has been in the red since his demise over succession fights, bad debts, mismanagement, and tax issues with KRA.