The High Court has issued an order restraining the Kenya Commercial Bank from placing Proctor & Allan (EA) Limited under receivership over an alleged Ksh 3.7 billion bank loan.
The order further blocks KCB from appointing Swaroop Rao Ponangipalli and Ponangipalli Venkata Ramana Rao as receiver managers of Proctor and Allan (EA) limited.
The Court also a status quo between the respondents (KCB, Swaroop Rao and Ponangipalli Venkata) and Proctor Ltd be maintained in order to preserve the assets of Proctor & Allan Ltd.
“That pending the hearing and determination of the application the respondents be and is hereby restrained by an order of this court from denying directors and authorised officials of Proctor unfettered access to the applicant’s assets, offices, security keys, all company records, emails, all funds and bank accounts, all contracts and all matters pertaining to the business of the applicant.” Ordered Lady Justice Njoki Mwangi.
In the case, Proctor & Allan Ltd moved to court through WE, KASIMBAZI & COMPANY ADVOCATES on February 26, 2025, challenging an order by the High Court that placed it under receivership of Swaroop Rao Ponangipalli and Ponangipalli Venkata Ramana Rao.
According to Proctor & Allan Ltd, on 27th August 2024 following negotiations between the Company and KCB, the bank accepted a net payment of Ksh. 1,000,000,000.00 by 30th November 2024 being a final and full settlement of the loan credit facility under the Debenture dated 1st November 2013 and supplemental debenture dated 28th October 2015.
Further, Proctor told Court that KCB was well aware that the company was undergoing a strategic investor process of acquisition to raise capital from investors to fully settle their outstanding credit facility.
It was in this spirit that in a letter dated 18th June 2024 the Applicant through their financial Consultant NISK Capital had appraised KCB of the offer valued at USD. 10,000,000.00 (approx. Ksh. 1,250,000,000.00) that was subject to due diligence.
Consequently, Proctor informed Court at all material times they acted with utmost good faith and ensured that KCB was well appraised of all developments in respect to securing the USD. 10,000,000.00 investment that would settle the outstanding debt.
Court documents show that to the surprise of Proctor & Allan Ltd, on Friday 21st of February 2025, KCB issued them with a demand notice for the immediate payment of Ksh. 4,918,591.477.71 being the outstanding loan, accrued interest and charges.
The said amount was much more than what had been agreed upon by Proctor & Allan Ltd and the Kenya Commercial Bank.
The Court heard that shortly thereafter in a blatant display of bad faith on Monday 24th February 2025 KCB purportedly appointed Swaroop Rao Ponangipalli and Ponangipalli Venkata Ramana Rao as Joint Receivers Managers of Proctor & Allan Ltd to take over its assets and operations on account of the outstanding loan in the aforesaid demand notice dated 21st February 2025.
The case will be mentioned in Court on March 13, 2025.
