The High Court has restrained Equity Bank from appointing a Receiver Manager(s) to manage Transcentury PLC.
Justice Alfred Mabeya suspended receivership pending the hearing and determination of the case filed by Transcentury opposing its receivership.
The court restrained Equity from appointing a receiver manager, Administrators or exercising its powers under the Debenture dated 6th June 2013, the Supplemental Debenture dated 20th January 2014 and the Second Further Debenture dated 11th November 2014.
“A temporary injunction be and is hereby issued holding in abeyance the actions and appointment of the 2nd & 3rd Respondents as Receiver Managers of the Plaintiff/Applicant pursuant to the Debenture dated 6th June 2013, the Supplemental Debenture dated 20th January 2014 and the Second Further Debenture dated 11th November 2014,” Justice Mabeya ruled.
The Judge further ordered the existing “status quo” between the parties as at the date immediately prior to the appointment of George Weru and Muniu Thoithi on 16th June 2023 be maintained in order to preserve the assets of Transcentury PLC.
In addition, the court restrained Equity Bank, George Weru and Muniu Thoithi from denying the directors and authorised officials of Transcentury Plc, unfettered access to Transcentury’s assets, offices, security keys, all company records, emails, all funds, all bank accounts, all contracts and attendant document and all matters pertaining to and related to the business of Transcentury.
According to Transcentury, on 16th June 2023, Equity Bank purportedly appointed George Weru and Muniu Thoithi as Receiver Managers and have since forcefully entered Transcentury’s premises and purported to take over all operations and control thereof effective 16th June 2023.
Nyachoti told the court that the said unlawful and forceful takeover of the business by Weru and Thoithi has gravely prejudiced and destabilised its operations and ability to continue as a going concern warranting the urgent intervention of the court.
He added that the said actions will also impact on the ongoing rights issue in respect of the applicant which is intended to inject money into the applicant so as to liquidate the subject debt.
“The applicant is in the final stages of finalising the rights issue to the tune of Sh 2,000,000,000 for purposes of injecting capital into its business which fact Equity Bank is fully aware of and the said injection of the capital shall be jeopardised to the grave prejudice and detriment of the applicant in the event that the orders sought are not granted,” Nyachoti added.
The court heard that the said capital to be injected into the company would be sufficient to offset any such outstanding debt, therefore such, the said appointment of Weru and Thoithi as Receivers is unwarranted and unnecessary.
Nyachoti termed the purported appointment of Weru and Thoithi as Receivers as unlawful and in utter disregard of the mandatory procedure set out in the Insolvency Act as read with the Regulations
According to him, Equity Bank is not a holder of any qualifying floating charge whatsoever, since the Debentures held by the Bank were registered before 2015 and the Bank cannot therefore lawfully appoint a receiver thereunder as purported or in the manner and style it has done.
