The official receiver has been directed to convene a meeting of all creditors of the once giant road construction firm Put Sarajevo General Engineering Company Limited, which was put under liquidation over mounting debts.
The High Court directed the official receiver to bring together all the creditors and file a report in court within 45 days.
The court gave the directive after some of the creditors, including the law firm of Hamilton, Harrison & Mathews, informed it that the official receiver had not updated them on the status of the company’s assets and the liquidation process.
The Milimani Law Courts.
Photo credit: File | Nation Media Group
Further, the court was informed that the directors of the firm, which thrived under the late President Daniel Moi's regime, had since left the country.
“The Official Receiver should therefore do all the necessary, including convening a meeting of all creditors and a report be filed in court within 45 days,” said the court.
The court was informed that other than assets such as land, there are some payments that the construction firm was awaiting from the Attorney General arising from an arbitration.
The company had been put under liquidation over a debt of Sh800 million, but it obtained a temporary court order stopping the process.
The court declared the firm insolvent for failing to pay HHM, a tyre supplier, and the National Bank of Kenya (NBK).
HHM moved to court in 2020, saying that Put Sarajevo was unable to pay a debt of Sh5.8 million, arising from legal services it offered to the construction firm.
The law firm said it issued a demand to the former client on March 17, 2020, asking the construction company to pay the amount.
As the case was pending determination, Arrow Cars Limited applied to join the matter as a creditor.
Pending bills
The company said it supplied tyres to Put Sarajevo on a credit basis and that the construction firm had failed to clear a balance of Sh2.98 million. As of January 30, 2023, the supplier said the debt stood at Sh4.8 million.
NBK also joined the case, saying it extended credit facilities to the construction firm, consisting of overdrafts, asset finance, bonds, and guarantees for purposes of working capital requirements as the firm undertook various civil construction projects with Kenya Rural Roads Authority and Kenya National Highways Authority.
The lender said as of March 12, 2019, the claim stood at Sh876 million. Another creditor is NCBA Bank.
Liquidation is the process of winding down a company, selling off its assets, and settling its creditors and shareholders before ceasing operations. Companies liquidate when they cannot meet their obligations as they come due.
