Proctor & Allan Limited, one of the country’s oldest food processors, has gotten a reprieve after it secured an injunction from the High Court restraining Kenya Commercial Bank (KCB) from placing it under receivership over a KSh 3.7 billion loan. The court issued an injunction against KCB that had been allowed to appoint a receiver for the cereal manufacturer Proctor & Allan. The High Court placed in abeyance the appointment of Swaroop Rao Ponangipalli and Ponangipalli Venkata Ramana (PVR) Rao as the company’s receiver managers. Lady Justice Njoki Mwangi of the Commercial Division of the High Court issued the stay orders in favor of the company on Thursday, February 27.
Proctor & Allan Ltd moved to court on Wednesday, February 26, challenging an order that placed it under the receivership of Swaroop Rao Ponangipalli and Panangipalli Venkata Ramana Rao. Following the case, Justice Mwangi directed the already-appointed receivers not to interfere with the operations of the company. The order remains in force until further instructions are provided by the court. The judge further instructed that Proctor’s operations should continue as they were prior to the appointment of the two receiver managers by Kenya Commercial Bank (KCB). “That in the interim, the respondents be and are hereby restrained by an order of this court from denying the directors and authorised officials of the applicant, unfettered access to the applicants’ assets, offices, security keys, all company records, emails, all funds, all bank accounts, all contracts and attendant document and all matters pertaining to and related to the business of the applicant,” the court directed, in documents seen by TUKO.co.ke
Why Proctor & Allan has contested being placed on receivership In its case, the company argued that on August 27, 2024, KCB agreed to accept a one-off payment of Sh1 billion, which was due to be settled by November 30, 2024. Proctor claims that KCB is aware of its ongoing KSh1.8 billion bailout but is still demanding repayment. The High Court’s Economic Division issued orders temporarily halting KCB from placing the company under receivership.Stephen Nthei, the firm’s director, testified that in 2013, Proctor received a KSh1.6 billion loan from KCB, repaying over KSh 506 million in interest and penalties. According to the company, the original agreement required it to pledge its current and future assets as collateral, along with a prime piece of land. The company’s fixed assets, vehicles, equipment and contracts, among others, were used as security for the said loan. Mention for the case has been set for March 13, 2025. When was Proctor & Allan founded?
Proctor & Allan, one of the oldest food processors in Kenya, was founded in the 1940s in Nakuru and later relocated to Nairobi. In 1999, local investors and the Acacia Fund acquired it from the Unga Group. The company has connections to prominent individuals, including billionaire Ngugi Kiuna, former East Africa Cables chairman Zephaniah Mbugua, and former Kengen CEO Eddy Njoroge. Kenyan companies that reduced operations in 2024 Previously, TUKO.co.ke reported that harsh economic times had forced many companies in the country to cut jobs and reduce operations. At least five companies cut jobs in the country in 2024, with a report by the Federation of Kenyan Employers (FKE) revealing that between October 2022 and November 2023, at least 7,000 formal workers lost jobs.
by Zipporah Weru Joshua Cheloti
