NCBA Bank has secured a reprieve after the Court of Appeal halted a High Court order that had installed the Official Receiver to supervise the restructuring of indebted logistics firm Multiple Hauliers EA Ltd.
- •The suspension preserves NCBA’s ability to press its claim for more than KSh 7.25 billion while its appeal over the appointment is heard.
- •The appellate judges ruled that the appointment of the Official Receiver, made by Justice Alfred Mabeya in September 2024, raised an arguable legal issue and risked exposing NCBA’s loan to irreversible loss.
- •At the High Court, Justice Mabeya had extended protection against creditor action to allow Multiple Hauliers to conclude a transaction with South Africa’s Amava Consortium, which had tabled a term sheet and secured an US$8.5 million guarantee from an investment fund.
“We agree with the applicant that this limited administration did not preserve the assets and accounts of the respondent to ensure the right of the applicant to recover its loan. In effect, the applicant is likely to suffer irreversibly, if stay is not granted and the intended appeal ultimately succeeds,” the Court of Appeal ruled.
Justice Mabeya had limited the Official Receiver’s role to supervising the transaction and overseeing the transition to the new investor, with progress reports due every 60 days. All enforcement measures by creditors were suspended.
NCBA objected, arguing the judge lacked jurisdiction to appoint the Official Receiver without an application and that its statutory right as a secured lender to install administrators had been disregarded.
The bank also noted that the narrow scope of the Receiver’s mandate effectively left control of the company’s assets in the hands of directors, exposing lenders to value erosion.
Multiple Hauliers countered that the Amava deal was the most viable path to preserving the business. Previous investors had failed to inject capital and disagreements among major lenders slowed approvals.
The stay order leaves the Amava transaction in limbo and delays the restructuring of one of Kenya’s largest transport and logistics firms, which has struggled to stay afloat under billions of shillings of debt owed to multiple banks including NCBA, KCB, Cooperative Bank, and I&M Bank.