Banda Homes Scandal: Troubled real estate firm Banda Homes is facing imminent collapse after an investor asked the court to liquidate the firm. Susan Obuya, who is an accountant based in Netherlands has asked the High Court to liquidate the company for failing to repay her investment of Sh. 5.9 which she poured into the firm to have a maisonette house built for her in 2019.
Ms. Obuya says that she invested the money in the firm’s development project in Thika which was dubbed as Red Oak Estate. However, this project stalled in 2020 after the developer was asked to leave the construction site.
“Under the agreement that Ms Obuya and Banda Homes signed in 2019, the construction was to be completed within 15 months. This means that Ms Obuya should have received the keys and title deed to her new home in June, 2020,” a report on Ms. Obuya’s liquidation case said.
The report added that the contract Ms. Obuya signed with Banda indicated that her payment would earn an interest of 14 per cent per year from the date it was signed. This now indicates that Banda Homes owes Ms. Obuya up to Sh. 6 million.
“The company failed to deliver the unit and has refused, neglected and/or failed to pay the petitioner the sum of Sh. 5,906,060. The petitioner does not, nor does anyone on its behalf hold any security on the company’s assets over the debt owed. The company has been unable to pay the amount due and owing despite demand and/or issuance of notice,” Ms. Obuya said in her petition to the court.
She added that “the petitioner therefore humbly prays that Banda Homes Limited be liquidated under the provisions of the Insolvency Act, 2015… That the Official Receiver, as a qualified and authorized insolvency practitioner be appointed as interim liquidator.”
In May 2020, Banda Homes hit the headlines after it was busted for what looked like another real estate scam. The firm had failed to deliver houses to its clients two years after receiving hundreds of millions. The buyers bought the houses in an off housing plan. The houses were to be built along Thika Superhighway at Pinewood and Rosewood estates. The buyers paid Sh. 3.9 million each for the houses. A site visit that was conducted by buyers revealed that the houses are far from ready.
In February 2020 also, Banda Homes Limited was accused of shortchanging their buyers. The developer was accused of failing to deliver homes to buyers despite having received deposits amounting to Sh 1.5 billion since 2018.
The reports claimed the money raised was used partly to pay for the land where several other estates will be built on Kenyatta Road and in Kikuyu near Sigona and to finish up old projects. The firm, the reports claimed, has re-branded at least two times since 2011, during which it has acquired new names to avoid being followed by clients after allegedly failing to deliver on projects.
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