Bank of Baroda barred from taking over operations at two Thika institutions over Ksh.370M loan

The High Court has restrained Bank of Baroda Kenya and two other businessmen from taking over the operations of Thika Nursing Home and Thika School of Medical and Health Sciences over a Ksh.370 million debt pending hearing and determination of the case.

In the case, the bank is accused of taking over the management of the two institutions and listing them with the Credit Reference Bureau (CRB).

According to papers filed at the Milimani Law Courts, the two institutions argue that after the pandemic, business became low and as a result, they started struggling with repayment of their loan facilities.

“The applicant sought to restructure its debts with the 3rd respondent. The challenges persisted due to slow growth in economy occasioned by the pandemic. The 3rd respondent kept on piling pressure on the applicant and issuing threats meant to paralyze the operations of the applicant,” read court papers.

Through lawyer Prof. Tom Ojienda, the petitioners argued that the bank listed them with CRB despite an order issued by a Kiambu court restraining the bank from downgrading or interfering with the two institutions’ credit rating and listing or in any way whatsoever interfering with their loan accounts.

They further argued that the move made it difficult for them to finance their operations and repay the facility, claiming that Bank of Baroda also went ahead to appoint two businessmen namely Ponangipalli Venkata Ramana and Swaroop Rao Ponangipalli as the administrators on account of three debentures.

“The applicant had actually opted to borrow from other more understanding and genuine banks to repay its loan with the 3rd respondent but the 3rd respondent has been frustrating the applicant’s efforts by listing it negatively with the CRB so that the applicant is economically crippled and fail to meet its obligations so that the 3rd respondent could appoint administrators to mismanage it and dispose of its assets at a throw away price,” argued Prof. Ojienda.