BY SAM ALFAN.
Loss-making cement maker Savannah Cement has been caught up in a vicious court battle pitting two banks as each lender seeks to assert control over its assets.
Absa Bank moved to court early this month accusing KCB Bank of frustrating efforts for an out-of-court settlement of the multi-billion suit.
Absa claims in the application that KCB Bank filed a petition intending to undermine and frustrate the ongoing administration process.
The lender now wants the KCB appointed receiver and manager removed stating that they were frustrating the administrator from implementing the statement of proposals passed on 17th April 2024 at the first creditors of the company.
Absa said the parties had earlier agreed to explore an out court settlement whereby the application was withdrawn to allow the administrator process to continue as directed by the court.
However, KCB ignored to pursue the settlement and instructed the receiver and manager to frustrate and undermine the administrator from carrying out his duties.
Absa wants the court to order the removal of PVR Rao and Ponangipalli Swaroop Rao or any other person acting or purporting to act on their behalf from interfering with the administrator’s control.
“That this honourable court be pleased to remove Mr Ponangipalli Venkata Ramana Rao and Mr Ponangipalli Swaroop Rao from office as the receivers and managers of Savannah Cement ltd,” Absa said in the application.
The lender want the court to direct OCS Athi River Police station to provide security and enforce the orders by the court.
Absa revealed that following the court order on March 19, this year, the administrator prepared the settlement of proposals.
The statement of proposals set out the manner in which the company’s affairs were managed, including the details of the steps taken since his appointment and recommended course of action for consideration.
The administrator held the first creditor’s meeting on 17th April and during the meeting, the creditors who were present and voting in person or proxy accepted the said statement of proposals unanimously.
The Administrator prepared a Report and filed it in court.
However, the receiver & manager are frustrating the implementation of the Report.
“Since the unanimous voting and adoption of the said Statement of Proposals and Report, KCB , the appointee of the said Receivers & Managers has frustrated the administration process as demonstrated below, KCB filed an application dated 16th May 2024 opposing the implementation of the said Report and Statement of Proposals,” Absa said.
Absa said a visit at the Athi River based company revealed a costly vandalism of critical infrastructure and equipment, which allegedly happened under the watch of the Receivers & Managers to the detriment of the value of the assets of the Company.
