Equity Bank now digs in for TransCentury receivership
Equity Group Holdings PLC Chief Executive Officer Dr James Mwangi briefs investors during an Investor briefing and Release of the 2023 Quarter One results at Equity Center on May 16, 2023. PHOTO | FRANCIS NDERITU | NMG
Equity Bank Kenya on Wednesday urged the High Court to lift an order blocking the receivership of TransCentury and East African Cables Ltd arguing that the orders were obtained without disclosing important facts to the court.
The lender told Justice Alfred Mabeya that TransCentury does not deserve intervention because it failed to disclose to the court that the company could not repay loans as the firm raised only Sh828 million from the rights issue.
Further, the lender through senior counsel Kiragu Kimani and Lawson Ondieki said the firm could not possibly raise Sh2 billion as claimed.
While urging the court to lift the order blocking Muniu Thoithi and George Weru from taking over the running of TransCentury, Mr Kiragu said the debtor failed to disclose to the court that it had acknowledged the debts and pleaded with the lender for a 90 days grace period as they negotiated the repayment plan.
“This is a party that approached the court in bad faith by failing to disclose material facts,” said Mr Kiragu.
The lender placed the two firms under receivership after declining a request to write off over Sh2.8 billion ($20 million) debt owed by TransCentury Plc and another Sh1.948 billion owed by its subsidiary East African Cables.
The application was supported by Paul Ogunde for the receiver managers, saying TransCentury was trying to create an impression that they wanted to impair or disrupt the businesses.
“The truth is that there was amiable and amicable engagement on the takeover. It is our submission that the ex-parte injunction obtained ought to be set aside,” Mr Ogunde submitted.
The lawyer asked the court to vary an order issued in June, blocking TransCentury from dealing with the funds raised from the rights issue so that the firm could release Sh108 million towards the payment of the loan.
