Bank of Baroda to retain control of medical school – Business Daily

A Bank of Baroda branch in Nairobi. FILE PHOTO | NMG
The Court of Appeal has rejected an application by the owners of Thika School of Medical and Health Sciences and Thika Nursing Home to suspend the placement of the institutions under administration for defaulting on a Sh262.8 million loan from Bank of Baroda.
The bank appointed Swaroop Rao Ponangipalli and Ramana Rao as administrators of the institutions last year to protect its interests following their default on the credit facilities which continue to attract interest.
The managing director of the institutions, Barham Dev Vasishtey, wanted the appellate court to bar the bank and the joint administrators from dealing with properties of the health facilities pending determination of an intended appeal.
But the court threw out the request saying what was sought to be restrained had already taken effect because the joint administrators had taken over the companies based on an order of the High Court.
“It is also our view that reversing the status quo currently obtaining on the ground may adversely impact negatively on the mutual interest of the parties in relation to the financial management of the companies in the face of insolvency during the pendency of the determination of the appeal,” said the appellate court.
The three-judge bench held that there was nothing to suggest that the continued administration of the companies in the absence of restraining orders would render the intended appeal insignificant in the event that the appeal succeeds.
“Our reason for holding this view is that it is evident from the record that the joint administrators are not only accountable to the bank, but also to the companies for the manner in which they administer and manage the business affairs of the companies under insolvency,” said the judges.
The judges added that any maladministration or mismanagement can be adequately compensated or redressed by an award of damages.
The bench comprised justices Roselyne Nambuye, Msagha Mbogholi and Dr Imaana Laibuta.
The judges however said the intended appeal is arguable and is not frivolous.
In the intended appeal, the companies are challenging the qualifications of the joint administrators and legality of their appointment in enforcement of the debentures and charges in the issue.
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By Kwetu Buzz

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