Absa Bank Kenya has reportedly put 40 Cars linked to the Itare Dam on auction in a bid to recover more than 585 million Kenya shillings loan that was taken by a bankrupt Italian firm to construct the Dam.
According to a notice issued by Phillips International Auctioneers, the forced sale of the seized cars and equipment such as cranes, prime movers, tippers, and Isuzu D/Max has been scheduled for October 28th 2021.
According to business Daily, The Italian firm behind Itare Dam went bankrupt and filed for insolvency in Italy to rescue its operations and prevent the company from being liquidated.
It sought to freeze the auction in Kenya pending a decision of the Italian courts, but Justice Francis Tuiyott rejected the application.
Absa and the Italian firm fought over the cars in a period that saw the Director of Criminal Investigations seize 17 vehicles on claims they were financed using public funds.
As a result, the auction follows a consent signed before Justice David Majanja between Absa and the Italian firm as added by Business Daily, with the bank expected to issue a report on what they get from the auction.
“If there is any shortfall from the sale of the motor vehicles and equipment, such shortfall shall form part of the plan for composition currently being administered in Italy and recognised in Nairobi HCCOM MISC/E627 of 2019,” says the consent.
Phillips International Auctioneers issued the notice for sale of the vehicles and machinery last week.
“Duly instructed by our principals-the financiers, we shall sell by public auction the undermentioned vehicles and machinery at our offices situated at Kileleshwa estate along Kandara road in Nairobi on Thursday, October 28, 2021,” said the auctioneer.
CMC di Ravenna put the construction of the dam on hold in November 2018 and left the site after closing its offices in the country before handing over the project back to the Rift Valley Water Services Board (RVWSB).
The Italian firm was contracted by RVWSB to construct the Sh36 billion dam in Kuresoi-Molo in Nakuru County.
The board also sought to join the case arguing it provided Sh82.5 million for purchase of the 17 cars.
According to the board, the vehicles were to be registered under the Italian company and transferred to it once the project was completed.
The board maintained that the vehicles do not belong to CMC Di Ravenna, although the Italian company used the motor vehicles to secure a financing agreement with Absa in May 23, 2017, without their consent or knowledge.
On its part, Absa said the Italian company approached it in 2017 and 2018 for various financial facilities.
The facilities included asset financing, multi-option facilities (short-term loan/overdrafts) and working capital and bank guarantees.
The bank, through lawyer Kamau Karori, said it loaned CMC di Ravenna Sh585 million for the purchase of 98 vehicles and equipment to be used in the dams project.
The DCI had also targeted the vehicles but Absa objected saying the agency was confusing Kimwarer dams in Elgeyo Marwakwet County with Itare dam. The DCI was allowed to keep the 17 vehicles while some are being held by other creditors.
Documents filed in court by the DCI indicated that Sh160 million of the dams’ project money was paid to Toyota Kenya for 45 vehicles, ranging from Prados, Fortuners, Corollas, Hiace vans and pick-up trucks.
The Italian firm, through chairman Alfredo Fioretti, admitted the debt and default.
The lender successfully obtained an order seizing 98 vehicles but the DCI remained with 17. The Italian firm later agreed for the vehicles to be sold to recover the loan.
Source: Business Daily.
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