An I&M bank branch. The financier has been temporarily stopped from
auctioning property belonging to a plastic bags manufacturer. FILE PHOTO
| NMG
I&M Bank has been temporarily stopped from auctioning
property belonging to a plastic bags manufacturer in order to recover an
outstanding loan of over Sh300 million pending determination
of the actual amount owed.
of the actual amount owed.
Lady Justice Margaret Muigai
directed the lender to make available in court a reconciliation of the
accounts of Hi Plast Limited before it can proceed to exercise power to
auction securities offered by the plaintiff company for the loan.
Justice
Muigai heard from lawyer Eddy Orinde that Hi Plast is contesting the
amount demanded by I&M, arguing that there is an interest overcharge
of Sh53 million.
Giving directions, Justice Muigai
said a tabulation of the account of the company should be availed by the
bank to determine the amount owing.
She directed that
auctioneers Garam and Purple halt their move to sell the properties
until June 11, 2019 as they await proper directions.
Hi-Plast previously told the court that that the properties
targeted for sale, including its Industrial Area bags factory and
Westland properties, are currently worth Sh812 million.
Hi-Plast
ran into financial trouble following the government ban on plastic bags
in 2017. It had borrowed Sh300 million from I&M in 2015.
Hi
Plast says it engaged an audit firm that found the Sh53 million
interest overcharge, claiming I&M had priced its loan above the
legal cap of four percentage points above the central bank rate that
currently stands at 9 percent.
A liquidation case has been instituted by an unsecured creditor against Hi Plast and is being heard by another judge.
Justice
Muigai said she would peruse both cases relating to loan repayment then
avail summaries to confirm whether the matter is administrative or an
insolvency one.
The case will be mentioned on Tuesday.
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