November 26, 2024

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Bank Blocked From Taking Control of Hospital, College Over Ksh 370m Debt

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The High court has stopped a bank and two businessmen from taking over the operations of Thika Nursing Home and Thika school of Medical and health sciences over Ksh 370 million debt.

  Justice Alfred Mabeya issued the orders after the two institutions moved to court to block the Bank of Baroda and Ponangipalli Venkata and Swaroop Rao from taking over the operations of the institutions.

  “That there be a temporary injunction pending the hearing and determination of this application inter parties restraining the respondents, their agents, employees, servants or any other person or entity claiming through them from dealing in any way whatsoever operations of the applicant and or its properties and conducting any other business in regard to the applicant pursuant to the appointment of the first and second respondents as administrators of the applicant,” the judge ruled. 

The court has also ordered the application to be served upon the respondents to make their response within 14 days.

 The two institutions through their Lawyer Professor Tom Ojienda moved to court seeking conservatory orders against the respondents claiming the move by the Bank to appoint administrators to take over the operations of the institutions has crippled the operations of the institutions.

  In court documents, Ojienda claims they have been in a long commercial relationship with the bank spanning over a decade and the institution has been taking loan facilities to expand its businesses.

 The institutions claim to have been complying with loan repayment until March 2020 when the covid19 pandemic hit the country.  Loading…

“After the pandemic business became low as expected as a result, just like many other businesses, the applicant started to struggle with repayment of its loan facilities, the disputes thus became inevitable” read the suit papers.  

Thika Nursing home claim that they sought to restructure its debts with the Bank, but the challenges persisted due to slow growth in economy occasioned by the pandemic. 

Ojienda says the bank kept on pilling pressure to Thika nursing home by issuing threats meant to paralyse the operations of the institutions which made them move to court.

 The institution claims he submitted all the demanded documents and even began to repay the loan as per the proposed restructured plan. Between 21 October 2021 and 9th November 2021, they had paid a total of Ksh.15 Million. 

 In April this year, Kiambu chief magistrate court had issued an order restraining the bank from negatively listing the applicants with the credit reference bureau{CRB} an order which was later dismissed for want of jurisdiction by the magistrate court.

 The bank then moved quickly to appoint two businessmen namely Ponangipalli Venkata Ramana and Swaroop Rao Ponangipalli as the administrators on account of three debentures.