Bank barred from selling KPCU assets

A judge has extended orders barring Kenya Commercial Bank (KCB) from selling the assets of Kenya Planters Co-operative Union over a loan of Sh644 million.

Commercial Court Judge Muga Apondi will hear the dispute for two days on October 11 and 14.

He urged the parties to file their affidavits within 14 days.

Updating the judge on what had transpired since he last handled the dispute, KCB lawyer Kamau Karori, reminded the judge of the judicial review application filed by KPCU and informed him that it was thrown out by Lady Justice Roselyn Wendoh.

“There are substantial issues that have arisen since you last handled the matter including the dismissal of an application for judicial review by KPCU,” said Mr Karori. Justice Apondi has been on court vacation.

The sale by public auction of the union’s prime building in Nairobi was temporarily suspended last month by Justice Leonard Njagi.

Mr Njagi conceded to the long legal history of the dispute and directed that the matter be placed before his counterpart Mr Apondi for further directions.

No valid reasons

This was shortly after Lady Justice Wendoh dismissed KPCU application and declined to block the sale on grounds that the union had failed to meet its financial obligation.

She said the agreement between KCB and KPCU was a private commercial contract and the only recourse for the coffee farmer’s body was to pay the money advanced by the bank.

The judge ruled that there were no valid reasons to stop KCB from exercising its statutory rights to recover its debt through auction and dismissed the miller’s application for judicial review as an abuse of court process.

Under receivership

The co-operative was placed under receivership last October by KCB as debenture holders over a debt of Sh644 million and consultancy firm, Deloitte and Touche appointed to run the operations of the troubled miller.

KPCU claims the appointment of the receiver manager prejudiced the union, adding that it enjoyed an asset base estimated at Sh3.5 billion.

The once giant miller further argues that the receivership has affected the facilitation and orderly marketing of coffee for more than 700,000 small- scale farmers.