Thika Nursing Homes and Thika School of Medical and Health Sciences have been seized by the Bank of Baroda over debts. This comes after the High Court issued orders stopping the administrators of the institutions from controlling or managing any operations. The orders were issued by Justice Alfred Mabeya in November and discharged on December 29.
According to a notice that was published in the newspapers, PVR Rao and Swaroop Rao were appointed as the interim managers in charge of the operations at the institutions. The two were appointed as joint administrators by the bank on November 22.
“Accordingly, all matters relating to the company shall be referred to the joint administrator,” the notice said.
The proprietor of the college and the hospital went to court in November and obtained temporary orders, barring the joint administrators from conducting any business related to the school over a debt owed to the lender.
Through senior counsel Tom Ojienda, the proprietors said they had planned to restructure the debts with the bank but faced persistent challenges due to slow economic growth in year 2020.
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The institutions’ owner argued that the bank had been piling too much pressure on repayments despite the obvious economic challenges that started in 2020 when learning in all local institutions was suspended. The owners argued that they had already paid Sh.15 million when the administrators were appointed.
They further said that they had opted to borrow money from other banks to repay the outstanding loan but the Bank of Baroda frustrated this by listing the college with the CRB.
“It was thus very clear that the 3rd Respondent (Bank) was never interested in having the Applicant to repay its facility but preferred to maliciously frustrate and handicap it to fail in its financial obligations so that the 3rd Respondent can eventually take over its businesses through proxies,” the institutions argued in court.
The owners told the court that after taking over the administration of the college, the bank through the administrators fired all the teaching staff.