The High Court has blocked KCB Bank from placing Proctor & Allan Ltd under receivership over a Sh3.7 billion loan.
On February 27, Lady Justice Njoki Mwangi of the Milimani Commercial & Admiralty Division issued orders stopping further action until the case is heard and determined.
The court has also suspended the appointment of Swaroop Rao Ponangipalli and Ponangipalli Venkata Ramana (PVR) Rao as Receiver Managers.
Until the matter is resolved, KCB Bank cannot interfere with the company’s leadership or deny its directors and authorized officials full access to its assets, offices, security systems, financial records, emails, bank accounts, contracts, and other crucial documents.
The bank has until March 28, 2025, to file and serve its response. The case is scheduled to be mentioned on March 13, 2025, for further directions.
KCB Group took steps to place the cereals manufacturer under receivership, citing difficulties in repaying a 2015 loan used to establish a manufacturing plant in Limuru, Kiambu County.
Proctor & Allan Ltd, known for producing cornflakes, oats, porridge mixes, and cake mixes, has been grappling with financial struggles, compounded by stiff market competition and an unforgiving economic climate.
On February 24, the High Court initially placed the firm under the management of Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli. The receivers have since called on creditors to submit claims against the company by March 31, 2025.
Proctor & Allan Ltd has been a staple in Kenya’s food processing industry since the 1940s and is backed by prominent investors.
Among them are Zephania Mbugua, former chairman of East African Cables; Edward Njoroge, former CEO of KenGen; and businessman Ngugi Kiuna, who has investments across multiple industries. The company’s majority shareholder, Nefira Holdings, holds a controlling stake of 76.82%.
Proctor & Allan Ltd joins a growing list of struggling firms, including Mastermind Tobacco, once a dominant cigarette manufacturer, and LSHS, an automobile body firm.
