The I&M Bank has tried to acquire over 2 billion shillings owed it by Hi-Plast Limited through fraudulent means.
Hi-Plast Limited is a company that dealt in the manufacture and importation of plastic bags for household and commercial packaging in Kenya. The company suffered losses when the government through the National Environmental Management Authority (NEMA) banned the use of plastic bags in August 28, 2017.
Hi-Plast had borrowed Ksh300 million from the I&M bank in 2015; and as the ban took effect, they were unable to pay back the loan.
I&M Bank is accused to maliciously increasing interest payments on the loan, ‘with an aim of clogging the petitioner’s equity of redemption’.
Hi-Plast Limited filed a petition to stop the bank from taking up and auctioning their assets.
Hi-Plast wants the sale and transfer of its assets stopped, and the bank barred from charging interest on the accounts pending conclusion of the interest rate dispute and appointment of the administrator for the business.
Rogue I&M Bank
Despite the court orders stopping the bank from auctioning assets belonging to the company, the bank sold two of the prime properties situated in the city’s Lower Kabete area and has put an advert for the sale of a third house owned by Highgrove holdings limited.
Highgrove Holdings Limited is an umbrella firm for Hi-Plast limited.
The bank claims that properties had been disposed a day before the scheduled hearing of the suit and that if the bank was not stopped by a temporary order the sale would be effected and render the court proceedings nugatory.
Justice Okwany in early June 2019 had directed parties to file submissions and also issued a directive restraining the bank and the auctioneer Garam Investments Auctioneers from selling the property, but the bank and the auctioneers continued to put adverts in the daily newspapers.
For the above, Highgrove Holdings Limited’s lawyer Dr Eddy Orinda submitted that ‘the re-advertisement by the defendants for the sale of the suit property is an affront against the authority of the honourable court’. He asked a judge to flex the judicial muscle and cite the MDs of the two companies for contempt.
The MDs apart from being committed for civil jail may also be compelled to pay the costs of the suit personally.
Sources: Justice Now
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