The High Court has allowed directors of a quarrying company placed under receivership by NCBA bank over a loan of Sh247 million to defend the firm over fears that the receiver manager appointed by the lender might fail to protect their interests.
Justice Alfred Mabeya ruled that the directors of Sheng Shaung Quarry Ltd — David Muigai and Jencinta Njeri — can safeguard the company’s interests by pursuing the case just like the receiver manager provided they observe the objects of administration.
The lender placed the firm under receivership in 2017 over the loan, which it borrowed four years earlier. After failing to service the loan, the bank threatened to auction its property, which was used as security.
The firm got orders from the High Court, blocking the auction and the lender later appointed Kereto Marima as the receiver manager.
According to the directors, the property, which is valued at Sh3.1 billion, would continue to diminish at the expense of the shareholders as the loan and penalties accrue.
Mr Muigai said the receiver manager would be biased against the firm and might not prosecute the two cases against the NCBA, his appointing authority.
