Too Broke: Lebanese Firm Zakhem Faces Liquidation Over Sh460 Million Debt

A Kenyan firm has initiated insolvency proceedings against Lebanese construction company Zakhem International Construction Ltd over an unpaid debt of approximately Sh460 million ($3.56 million), potentially forcing the once-prominent contractor into liquidation.

Azicon Kenya Ltd filed the petition in the Nairobi High Court, claiming that Zakhem International has failed to settle the outstanding amount since 2020.

The debt stems from subcontracted electrical, instrumentation, and telecommunications installation work on the Sh48 billion Nairobi-Mombasa pipeline replacement project completed in 2019.

“The debtor has never disputed the excellent work done but failed to meet its part of the subcontract,” said Azicon Kenya Managing Director David Kibet Tonui in court filings.

According to court documents, Azicon Kenya was awarded a subcontract worth $10.14 million inclusive of VAT, but Zakhem International allegedly paid only $6.51 million before refusing to settle the remaining balance.

Despite obtaining a court order in September 2020 compelling payment, Azicon claims Zakhem International has avoided its financial obligations.

The company served Zakhem with an insolvency statutory demand on January 14, 2025, which went unaddressed for the required 21-day period.

Azicon’s legal representative, Collins Taliti, accused Zakhem of deliberately misleading the court by claiming it was still awaiting payment from Kenya Pipeline Company (KPC), which commissioned the original project.

“The debtor is deliberately and blatantly telling lies,” stated Taliti, citing affidavits proving KPC has already paid Zakhem International all amounts related to the project.

This includes an affidavit dated November 8, 2024, from Ibrahim Zakhem confirming that KPC was not holding any funds on its behalf.

This isn’t the first financial dispute involving Zakhem International’s work on the pipeline project.

Last year, another subcontractor, Multiple ICD (Kenya) Ltd, pursued a debt of Sh670 million from the Lebanese firm.

The case highlights growing concerns about Zakhem International’s financial stability, with Azicon alleging the company is “busy scheming and deliberately avoiding to pay by incorporating new companies to hide therein all the monies and assets belonging to Zakhem International Construction Limited in order to defeat justice.”

If the court rules in favor of Azicon Kenya, Zakhem International could face liquidation, marking a dramatic downfall for the international construction company that once secured major infrastructure contracts in Kenya.​​​​​​​​​​​​​​​​