Companies

Bank of Baroda seizes Thika Nursing Homes on default

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A Bank of Baroda branch in Nairobi. FILE PHOTO | NMG

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Summary

  • A notice published in the newspapers indicated that joint administrators —PVR Rao and Swaroop Rao — were now in charge of the operations of the institutions, after orders issued by Justice Alfred Mabeya in November were discharged on December 29.

Bank of Baroda has taken over the operations of Thika Nursing Homes and Thika School of Medical and Health Sciences after temporary orders that barred administrators from controlling the college were discharged by the High Court.

A notice published in the newspapers indicated that joint administrators —PVR Rao and Swaroop Rao — were now in charge of the operations of the institutions, after orders issued by Justice Alfred Mabeya in November were discharged on December 29.

“Accordingly, all matters relating to the company shall be referred to the joint administrator,” the notice stated.

The proprietor of the college and the hospital went to court in November and obtained temporary orders, barring the joint administrators from conducting any business related to the school over a debt owed to the lender. The two were appointed as joint administrators by the bank on November 22.

Through senior counsel Tom Ojienda, the proprietors said they had planned to restructure the debts with the bank but faced persistent challenges due to slow economic growth occasioned by the Covid-19 pandemic.

He said the lender has been piling pressure on the institution and issuing threats meant to paralyse the operations of the school, forcing the proprietor together with its sister institution, the Thika Nursing Home, to move to court for protection.

He said the institution has the ability to repay its debt and had indeed repaid Sh15 million only for the lender to appoint the joint managers.

The college said it had opted to borrow money from other banks to repay its loan but Bank of Baroda allegedly frustrated the bid by listing it with the credit reference bureau (CRB).

“It was thus very clear that the 3rd Respondent (Bank) was never interested in having the Applicant to repay its facility but preferred to maliciously frustrate and handicap it to fail in its financial obligations so that the 3rd Respondent can eventually take over its businesses through proxies,” Prof Ojienda submitted.

In September, the court issued an order directing that parties explore an out-of-court settlement and the parties met to discuss the repayment plan. The parties later drafted a proposed joint restructuring plan dated September 27, for consideration by the bank.

The court heard that soon after taking over the administration of the college, the administrators fired all the teaching staff, compromising the education of the students, mostly youths and risking their future.

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