The High Court has temporarily stopped the planned auction of Nairobi’s 14 Riverside Drive property complex after its owner, Cape Holdings Ltd, raised concerns over alleged undervaluation, procedural irregularities and opaque sale arrangements.
In court filings, Cape Holdings accused Synergy Industrial Credit and auctioneers of pursuing a flawed sale to recover a Sh1.66 billion arbitral award that has ballooned to more than Sh9 billion through accrued interest.
Part of the court documents includes a notification of sale dated March 18, 2026, indicating the outstanding debt stands at Sh10.6 billion. A September 2025 valuation report placed the property’s market value at Sh7.3 billion and its forced sale value at Sh5.4 billion.
Cape Holdings also complained of an alleged failure by Synergy to disclose a lawful reserve price and the use of defective auction documents.
“The applicant’s property stands to be sold through a secretive and unlawful process marked by non-compliance with mandatory legal requirements,” the company said in court papers.
Auction halt
The court issued interim orders halting the May 26 public auction pending further directions on June 2.
The dispute centres on efforts by Synergy Industrial Credit Ltd to recover money awarded in arbitration following a collapsed property transaction dating back to 2011.
Cape Holdings claimed the intended auction was riddled with “multiple procedural and substantive defects” and designed to facilitate the sale of the property at an undervalue.
The company accused Moran Auctioneers of relying on stale notices issued in January 2022, failing to disclose a lawful reserve price and conducting the process in breach of the Auctioneers Rules and Civil Procedure Rules.
“The entire process is irredeemably flawed, unlawful, and shrouded in secrecy,” Cape Holdings said in the application backed by director Bipinchandra Sanghrajka’s affidavit.
Court documents show the property scheduled for sale is LR No. 209/19436, which houses the 14 Riverside Drive development.
Cape Holdings told the court that although a fresh valuation was conducted by Knight Frank in September 2025, the auction process still relied on reserve prices linked to valuations conducted nearly six years ago.
The company argued that warrants of sale issued in March 2026 did not disclose any reserve price.
It also claimed that a newspaper advertisement published on May 7 referred vaguely to “court guidelines” without specifying the applicable reserve price.
“In the absence of any fresh judicial determination fixing a reserve price on the basis of the 2025 valuation report, there exists no lawful reserve price governing the intended sale,” the company said.
Cape Holdings also faulted the valuation report, arguing that it failed to distinguish portions already sold to third-party leaseholders from the residual property available for sale.
Long battle
According to the filings, the only notice served was a court-issued notification originally dated January 5, 2022, and later re-dated March 16, 2026.
Cape Holdings also disclosed plans to file a constitutional challenge against the debt, arguing that the accrued interest had become punitive and threatened to wipe out its asset base.
The dispute dates back to 2011 when Cape Holdings and Synergy entered into agreements for the purchase of two blocks in the then under-construction development.
Synergy later scaled down the purchase to one block valued at Sh703.2 million before disagreements emerged over project delays and refund claims.
The matter proceeded to arbitration in 2015, where the arbitrator ordered Cape Holdings to refund Sh1.66 billion covering principal sums, interest, opportunity costs and foreign exchange losses.
