Investment firm appeals case against KCB over Pinewood Hotel takeover

Itco Investments Limited challenges KCB in court over Pinewood Hotel ownership A court dispute between a private investment firm and Kenya Commercial Bank (KCB) over a luxurious Kwale hotel has landed in the Court of Appeal. The investment company, Itco Investments Limited (ITCO) has appealed High Court's decision that paved way for KCB's receiver manager Kamal Bhatt to take over Pinewood Beach Resort and Spa. ITCO is the Pinewood operator. In its appeal, it claims that the High Court Judge Peter Mulwa failed to consider that it was not a party to the case pitting KCB and Pearl Beach Hotels Limited (PBHL). The Judge last week dismissed ITCO's application after finding that it did not disclose that there was an active case revolving the Sh 5.8 billion loan row. KCB is after English Point Marina, which is owned by PBHL and Pinewood to recover its debt. Nevertheless, ITCO's lawyer Conrad Maloba argued that Pinewood is a separate entity from PBHL. " The learned Judge erred in law and in facts by finding that the plaintiff did not reveal material information concerning active proceedings touching on the same subject matter particularly before the High Court and Court of Appeal in Mombasa. The plaintiff herein is a separate entity and was not party to the Mombasa suit," said Maloba He added that Pinewood was not a part of the security, hence cannot be placed under receivership. In his supporting affidavit, ITCO Director Alnoor Kanji told the court that his firm would suffer losses if KCB receiver manager is allowed to take over the hotel. He asserted that ITCO did not participate in the case between KCB and PBHL. The case is currently before the Court of Appeal. PBHL urged the Court of Appeal to block KCB from taking over the facility arguing that the bank had irregularly moved to seize the property without following due process. The company argued that KCB miscalculated the amount due to it from the initial loan of Sh4.8 billion and came up with an abnormal figure of Sh5.2 billion without considering the substantial amount of the loan which has already been repaid. According to the lawyer, the hotel's management had already made a proposal to the bank on how to settle the remaining balance but the bank illegally moved in hurry to seize the property without giving the owners a chance to settle the dispute. "It is true the bank advanced a loan of Sh4.8 billion to the company but they have so far repaid Sh3.3 billion which they continue to service as per the loan agreement. There was only a dispute in computation of some interest amounting to Sh893 million but which is being settled," PBHL court papers read in part. The firm added that it was unlawful for KCB to appoint the receiver manager and lock out the hotel directors Nazir Jinnah and Alnoor Kanji who live within the premises with their families while still expecting that they be paid the loan balance. PBHL told the court that the hotel's management had already presented a proposal to KCB on how to settle the remaining loan balance of Sh1 billion which does not justify the decision to place it on receivership. "The applicant is a highly specialized luxury hotel offering 5-star services and has developed unique trade-craft for the befit of the clients. The dramatic and illegal appointment of the receiver manager places at risk the very asset the bank want to protect to get its money back," it claimed.

Investment firm appeals case against KCB over Pinewood Hotel takeover

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Investment firm appeals case against KCB over Pinewood Hotel takeover

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