×
The Standard Group Plc is a multi-media organization with investments in media platforms spanning newspaper print operations, television, radio broadcasting, digital and online services. The Standard Group is recognized as a leading multi-media house in Kenya with a key influence in matters of national and international interest.
  • Standard Group Plc HQ Office,
  • The Standard Group Center,Mombasa Road.
  • P.O Box 30080-00100,Nairobi, Kenya.
  • Telephone number: 0203222111, 0719012111
  • Email: [email protected]
Premium

Blow to Equity in Transcentury contest

Business

The High Court in Nairobi on Friday delivered a major setback to Equity Bank in its Sh6 billion dispute with investment firm TransCentury after it rejected the bank's quest to take TransCentury back to receivership.

Justice Alfred Mabeya rendered a verdict deeming Equity's application without merit.

And in what amounted to a double blow to the bank, Justice Mabeya extended orders preventing Equity Bank from seizing or interfering with TransCentury's assets, until the case is heard and determined.

TransCentury had, four months ago, initiated legal proceedings against Equity, claiming the bank had taken control of its premises and unlawfully appointed administrators to run the firm.

Forceful takeover

Lawyer Philip Nyachoti, for TransCentury, informed the court that the bank's forceful takeover had adversely affected the investment firm's operations, despite prior discussions with the bank on a loan payment plan.

"The company informed the bank that it was in the final stages of closing a Sh2 billion rights issue to inject capital into the business and cover the outstanding loan balance, but the bank had rejected the offer," Mr Nyachoti said.

The dispute is rooted in a $87 million (Sh12.1 billion) loan that Equity extended to TransCentury between June 2013 and November 2014.

TransCentury, an investment and infrastructure company, told the court that it had substantially paid the loan and consistently made payments until June 12, 2023, when the bank demanded full settlement of the outstanding amount.

Mr Nyachoti argued that the bank, in demanding payment of a Sh6 billion balance, had miscalculated the amount owed, which significantly exceeded TransCentury's actual liability.

He added that TransCentury had earnestly attempted to negotiate with Equity in light of the challenging economic conditions facing the country, but the bank had rebuffed its efforts.

Equity Bank, through lawyer Kiragu Kimani, told the court it feared that TransCentury could liquidate some assets it used to secure the loan unless they were frozen.

Manage and dispose

Mr Kimani said the bank risked substantial loss if TransCentury were allowed to manage and dispose of properties it used as collateral to secure the loan.

Mr Kimani also noted that Equity Bank had, on June 8, demanded payment of the outstanding amount from the borrower, but TransCentury responded with a request for a 24-month moratorium.

Besides, he argued that TransCentury had not disclosed all relevant facts to the court when it obtained the court orders on June 20.

"As the plaintiff failed to disclose the information set out here above, the plaintiff did not approach the court with the utmost good faith, and the interim orders of June 20, 2023, should be set aside," he asserted.

Related Topics


.

Popular this week