BY SAM ALFAN .
Savannah Cement has suffered a major blow in its attempt to stop Absa Bank from taking over the management of the Kitengela based cement manufacturer.
Justice Alfred Mabeya dismissed the application the application to delay the takeover by the lender and gave Absa and KCB appointed administrator, Harveen Gadhoke, to manage the company.
In the ruling, the judge said Savannah Cement has not shown that the conduct of the administrator was reprehensible or that there exists any compelling reasons to suspend or terminate the administration.
The Judge added that to the contrary, the actions taken by Savannah cement and Saruji limited subsequent to the suspension of the administration are prejudicial to the administration.
“Accordingly, the application dated May 15, 2023 is found to be without merits and dismissed with costs. Let administrator take chance and act accordance with the law,” ruled Justice Mabeya.
The Judge further said the statutory timelines that were supposed to take effect on November 24 last year, shall commence immediately.
The firm moved to court seeking suspension of administration pending the determination of the application. The cement manufacturer further sought the administration of Absa Bank be terminated.
The companies argued that for the application were that, immediately the court delivered its ruling of May 12, 2023 and discharged the status quo, the Administrator proceeded to Savannahs’ premises and attempted to kick out staff, freeze its bank accounts in various banks, chase away suppliers, close the plant with a view to stop production and ultimately completely close down Savannah as a going concern.
That at the time, Savannah Cement and Saruji ltd were at an advanced stage of negotiations with both Absa Bank and Kenya Commercial Bank, another secured creditor of the plaintiff. It was also alleged that the ownership and management of the Savannah had since changed hands and the new management was committed to settling the secured creditors.
Absa Bank opposed the application through the replying affidavits of Harveen Gadhoke and Faith Mutuku.
Gadhoke refuted the claims that his actions were intended to close down the operations of Savannah Cement. He denied the infractions levied against him and explained how he had complied with the law on November 27, 2022 before the administration was first suspended.
The court said despite warding off the attempts by Absa Bank to exercise its rights under the debentures for over a year, no cogent and satisfactory steps were shown by Savannah Cement and Saruji Ltd, to have been undertaken towards improving the financial status of the company.
“No substantial or any repayments were shown to have been made for over a year. If any had been made, of course the negotiations the applicants wished to undertake with the Absa Bank respondent would have borne fruits,” said the judge.
Judge Mabeya observed that it is shocking that while the two companies advocates are fiercely fighting the secured creditors and keeping the Administrator at bay, they have swiftly moved to attach all the bank accounts of the company for their legal fees.
“That is astoundingly prejudicial to Absa Bank secured creditors who, in my view have been wrongly put on standby by the orders of this Court at the instance of the two companies,” said the judge while delivering the ruling.
