High Court Judge J.W.W Mongare has appointed a new administrator for Mumias Sugar Co. through a ruling dated 31st July 2023. The move is a big blow to a major local bank whose appointed receiver Ponangipalli Venkata Ramana Rao was kicked out.
Initially, the court had appointed Rao, as the 1st Administrator of Mumias Sugar Company Limited on behalf of 100 other supporting creditors. However, on the 14th of April, 2022, the court terminated his appointment and picked Mr Kereto Marima to be the 2nd administrator as per the provisions of the Insolvency Act, for 12 months.
Mr Rao and the bank filed an appeal and obtained an order staying the implementation of the orders effectively terminating the appointment of Mr. Kereto Marima as the 2nd Administrator of Mumias. Later, two applications were filed on 29th April 2023 and 4th May 2023 ostensibly seeking the court to appoint an interim administrator for the company.
The applications were however opposed by the bank and Mr Rao but supported by a body of creditors represented in the petition who decried the confusion and were apprehensive that in the absence of a duly appointed administrator in place, all the other creditors stood to suffer irreparably as they are left out of the receivership which meant aiding the bank, collecting its debt secured by various charges and debentures over the assets of the company.
Except for the bank, it was agreed that there was an urgent need to put in place a court-appointed administrator to alleviate the sense of frustration and desperation being felt by the creditors in the insolvency proceedings of the 3rd Respondent. Further, the petitioner and creditors accuse the bank, who through its duly appointed receiver, purported to give away the assets of Mumias, an action that was vehemently opposed leading to termination of the said action by order of the court.
The ruling reads “having perused the said record, and hereby appoints Harveen Kumar Manoharlal Gadhoke, Insolvency Licence No. OR/IP/006 as administrator of Mumias Sugar Company Limited in accordance with the Insolvency Act, No. 18 of 2015 for a term of 12 months from 1st August 2023”.
The ruling further reads “The 2nd Respondent (Rao), being the Receiver appointed by the 1st Respondent (the bank), shall with immediate effect handover the affairs of Mumias Sugar Company Limited including all books of accounts, documents, ledgers, leases, title deeds, log books and any other document or material of whatever nature concerning the affairs of the 3rd Respondent, Mumias Sugar Company Limited (in Administration)”.
The judge gave the following orders, THAT pending the hearing and determination of the Liquidation Petitions No. E004 and E007 of 2019 herein, an order be and is hereby issued appointing Harveen Kumar Manoharlal Gadhoke, Insolvency Licence No. OR/IP/006 as administrator of 3rd Respondent, Mumias Sugar Company Limited (in Administration) per the Insolvency Act, No. 18 of 2015.
THAT An order be and is hereby issued to the 2nd Respondent, Mr Ponangipalli Venkata Ramana Rao, to immediately give access to the new Administrator and file a full, accurate and comprehensive Report of all activities he has undertaken as a court-appointed administrator of the 3rd Respondent, Mumias Sugar Company Limited (in Administration) since 19th November 2021 to this court, through the Administrator, Mr. Harveen Kumar Manoharlal Gadhoke, for purposes of handover of the affairs of the 3rd Respondent, Mumias Sugar Company Limited(in Administration).
THAT An order be and hereby issued to the 2nd Respondent, Mr Ponangipalli Venkata Ramana Rao to immediately hand over the affairs of Mumias Sugar Company Limited including all books of accounts, documents, ledgers, leases, title deeds, log books and any other document or material of whatever nature concerning the affairs of the 3rd Respondent, Mumias Sugar Company Limited (in Administration), to Mr Harveen Kumar Manoharlal Gadhoke, the Administrator, with immediate effect.
THAT An order directed at the Inspector General of Police, the County Police Commander of Kakamega County, and the Officer Commanding Police Station Mumias to provide armed escort and security to Mr. Harveen Kumar Manoharlal Gadhoke, to enable the administrator to perform his duties and obligations under the Insolvency Act, 2015 in the administration of the 3rd Respondent, Mumias Sugar Company Limited (in Administration).
THAT An order directed at the Harveen Kumar Manoharlal Gadhoke, administrator, to conduct an asset count of all the assets, property and chattels of Mumias Sugar Company Limited (In Administration) and develop an asset register to be shared with this court and the creditors of Mumias Sugar Company Limited (In Administration) within two (2) months of being appointed as administrator.
THAT all creditors herein including the 1st Respondent shall with immediate effect and not later than 21 days from the date of this order, file their debts as of 31st July 2023 with Mr. Harveen Kumar Manoharlal Gadhoke, the administrator herein and the Administrator shall compile and file a report of the same with the court on the next court date but not later than 42 days from the date herein. This matter shall be mentioned for directions on 20th September 2023.
