Battle for insurance cash stalls Westgate business recovery

Mr Alex Tranchtenberg, Westgate Shopping Mall director, testifies before the Committee on Rapid Restoration of the Westgate Shopping Mall at Charter Hall, Nairobi, Wednesday. The mall was attacked by terrorists last year. Photo/SALATON NJAU

By Sandra Chao


IN SUMMARY
Owners of the mall that suffered a deadly terrorist attack last September say KCB has yet to release money paid by the building’s insurer for damages incurred.
Westage Mall is owned by Sony Holdings, a trading company in which Mr Trachtenberg has a significant interest.
KCB has laid claim on the money so far paid into Sony Holdings’ account, citing an outstanding loan that Westgate’s owners have with the bank.  


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Sharp differences between owners of Nairobi’s Westgate Mall and a local bank have stalled the recovery of businesses that occupied the building before September’s deadly terrorist attack, a committee inquiring into the matter was told Wednesday.

Alex Trachtenberg, a director in the company that owns Westgate, told the Committee on Rapid Restoration of Westgate business chaired by Nairobi Governor Evans Kidero that KCB had refused to release Sh600 million that KenIndia Insurance paid in lieu of the terrorism cover the owners had taken for the building.

Westage is owned by Sony Holdings, a trading company in which Mr Trachtenberg has a significant interest.

KCB has laid claim on the money so far paid into Sony Holdings’ account, citing an outstanding loan that Westgate’s owners have with the bank.  

“We cannot really say how long it will take to restore Westgate because KCB has laid claim on the money so far paid and was earmarked for restoration,” he told the committee.

The terrorism cover protected Westgate’s owners against loss of income, third party liability and restoration of the building in the event of an attack.

READ: Westgate attack to cost insurers over Sh10bn in claims

Mr Trachtenberg said that of the total sum insured, Sh400 million covered loss of income segment of the risks while the remaining portion covered third party liability and restoration.

“Cash from the loss of income claim is what should be used to pay the bank’s loan but we are yet to receive that money to date,” he told the committee.

The businessman told the committee that Sony Holdings had an existing loan with KCB and had never defaulted on the payments by the time of the attack.

“We never failed to meet our obligations with the bank on a monthly basis from the day we took the loan up to the time of the attack and even after so we don’t understand why they are behaving like this,” Mr Tranchtenberg said.

The businessman described the bank’s action as insensitive to the predicament of businesses that suffered immense losses in the wake of the September 21 terrorist attack.

“When you go to a doctor and you are bleeding they are obliged by the Hippocratic Oath to stop the bleeding first before any other consideration and the same principle should apply for the bank,” he said.

It was not possible to determine how much money Sony Holdings owes the bank as our calls and text messages to Sidi-Odhiambo, the banks corporate communications manager, went unanswered.

Dr Kidero had ruled at the committee hearings that details of the loans were a matter that did not have to be made public but asked the parties to provide the information in their written submissions.