KCB and I&M sucked in road contractor’s receivership suit
Justice Eric Ogola in March refused to lift the receivership after the contractor failed to show how it planned to clear BOA’s debt. PHOTO | FILE
What you need to know:
Kundan Singh Construction Company has filed a fresh suit in which it has sued KCB, I&M and BOA banks as it fights off the latter's decision to place it under receivership over a disputed $5.2 million (Sh503 million) loan.
The contractor says BOA is using the receivership as part of a scheme to take control of its assets, valued at Sh2 billion.
KCB and I&M banks have been sucked into a dispute between Bank of Africa (BOA) and the construction firm that is linked to suspended Transport secretary Michael Kamau’s troubles with the anti-graft watchdog.
Kundan Singh Construction Company (KSC) has filed a fresh suit in which it has sued the three lenders as it fights off BOA’s decision to place it under receivership over a disputed $5.2 million (Sh503 million) loan.
KSC has over the years charged property valued at Sh6 billion to BOA, KCB and I&M.
The contractor says BOA is using the receivership as part of a scheme to take control of its assets, valued at Sh2 billion.
It adds that the mid-tier lender has shot down pleas from KCB and I&M to accept installment payments for the debt, and has instead threatened to dissolve the firm.
The suit comes barely a week after the contractor withdrew another case it filed in February to fight off BOA’s receivership.
Justice Eric Ogola in March refused to lift the receivership after the contractor failed to show how it planned to clear BOA’s debt. It has since the ruling been in talks with BOA.
“KSC (the contractor) together with KCB and I&M have requested BOA to accept a structured repayment plan with a substantial downpayment of the outstanding debt but BOA has declined to accept any proposal, keeps changing its demands and has now actually threatened to liquidate KSC,” the firm says.
The firm that grew and thrived in the Moi era went into receivership on February 18, but says BOA did not issue any prior notice to it or the other two banks of its intended takeover.
KSC has faulted slow payment from the government for the loan defaults, as it insists it is owed over Sh1 billion for completed projects.
Barely a month after being placed under receivership, the Ethics and Anti-Corruption Commission accused KSC of colluding with Mr Kamau to alter designs for the Sh2.6 billion Kaptana-Kapsokwony-Sirisia Road with the aim of stealing project funds.
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