COURT BARS BANK OF BARODA INTERFERING WITH THE OPERATIONS OF MEDICAL SCHOOL.

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BY SAM ALFAN.

The High Court has stopped Bank of Baroda Kenya from interfering with the properties and business of Thika Nursing Home pending hearing and determination of a case filed by the institution.

Justice Alfred Mabeya temporarily barred the lender, Ponangipalli Venkata Ramana Rao Ponangipalli (PVR RAO) and Swaroop Rao Ponangipalli from interfering with the properties, business and operations of the institution.

“A temporary injunction is hereby issued restraining the respondents, their agents, employees, servants or any other person or entity claiming through them from dealing in anyway with the operations or of the applicant (Thika Nursing Home Ltd) pursuant to the appointment of Ponangipalli Venkata Ramana Rao Ponangipalli (PVRRAO) and Swaroop Rao Ponangipalli as administrator of the Thika Nursing Home Ltd on November 22,2021 by the Bank of Baroda Kenya pending hearing and determination of the case,” the Judge ordered.

Thika Nursing Home Ltd (under administration) through lawyer Prof Tom Ojienda moved to court seeking a temporary injunction restraining the bank from interfering with the operations of the college, pending the determination of a petition seeking to revoke the appointment of the joint administrators.

The Court heard that Thika Nursing Home and Bank of Baroda Kenya have had a long commercial relationship spanning over a decade and it has been taking loan facilities to expand its businesses.

But prior to March 2020 before the Covid-19 pandemic struck, the Nursing training was substantially compliant with all its loan obligations.

And just like many businesses, the institution started to struggle with repayment of its loan facilities and a dispute ensued.

The school sought to restructure its debts with the bank and the challenges persisted due to slow growth in the economy caused by the pandemic.

The court heard that the Bank kept on piling pressure on the institution and issuing threats meant to paralyze the operations of the school.

The Nursing home together with its sister institution, the Thika School of Medical & Health Sciences, a medical training institution providing certificate and diploma courses moved the Court in Kiambu Chief Magistrates Court to seek protection.

On April 20, 2021, the court issued an order of temporary injunction restraining the Bank from downgrading or interfering with the Nursing home and its sister institution’s credit rating and listing or in any way, interfering with their loan accounts.

However, the Bank went ahead and listed them with the Credit Reference Bureau (CRB), making things even more difficult for the institution to finance its operations and repay the loan.

The court heard that Thika Nursing home filed a contempt of court application against the Bank alleging that the lender was never interested in the repayment of the loan but it has plans to take over its businesses through proxies.

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