[2015] KEHC 6697 (KLR)
The court found that the Official Receiver's report on the liquidation of Nyayo Bus Service Corporation was incomplete and failed to address statutory requirements, including the preparation of a settlement list of creditors, custody of assets, public examination of officials, and submission of audited reports. The...
Source-derived case information.
- Citation
- [2015] KEHC 6697 (KLR)
- Parties
- Petitioner: State Corporations Inspectorate; Respondent: Nyayo Bus Service Corporation (In Liquidation); Applicant: Kinyosi Kitungi; Respondent: Official Receiver
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Winding Up Cause 5 of 1997
- Procedural Posture
- Winding Up Cause / Post Liquidation Management; Directions on Creditor Meeting
- Outcome
- Directions issued to restart the liquidation process and convene a creditors' meeting.
- Judges
- DO Ogembo
- Legal Topics
- Winding Up Procedure, Liquidation Reporting, Creditor Meetings, Official Receiver Duties
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
State Corporations Inspectorate
Petitioner
Nyayo Bus Service Corporation (In Liquidation)
Respondent
Kinyosi Kitungi
Applicant
Official Receiver
Respondent
Procedural Posture
Winding Up Cause / Post Liquidation Management; Directions on Creditor Meeting
Legal Issues
- 1 Whether the Official Receiver has complied with statutory duties in the liquidation of Nyayo Bus Service Corporation.
- 2 Whether the process of creditor settlement and reporting has been properly conducted and disclosed.
- 3 What directions should be given to regularize the liquidation process.
Ratio Decidendi
The court found that the Official Receiver's report on the liquidation of Nyayo Bus Service Corporation was incomplete and failed to address statutory requirements, including the preparation of a settlement list of creditors, custody of assets, public examination of officials, and submission of audited reports. The court determined that the process lacked transparency, particularly regarding payments made to some creditors without clear procedures. To regularize the process and ensure compliance with the law, the court ordered the Official Receiver to convene a meeting of all creditors, allow them to lodge claims, and provide an ascertained list of creditors to the court. The court...
Court Disposition
Directions issued to restart the liquidation process and convene a creditors' meeting.
Orders
- The Official Receiver shall within 30 days advertise for a meeting of all creditors of Nyayo Bus Service Corporation (in Liquidation).
- The meeting shall take place at the offices of the Official Receiver.
Full Case Text
Judgment text and source record
32 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
MILIMANI COMMERCIAL &ADMIRALTY DIVISION
WINDING UP CAUSE NO. 5 OF 1997
IN THE MATTER OF BUS SERVICES CORPORATION
THE STATE CORPORATIONS INSPECTORATE:::::::::::::::::::::::::::::PETITIONER
-VERSUS-
THE NYAYO BUS SERVICE CORPORATION::::::::::::::::::::::::::::::::RESPONDENT
KINYOSI KITUNGI ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::APPLICANT
R U L I N G
The Winding up Order was issued against the Nyayo Bus Service Corporation (In Liquidation) on 5th May 1997. Since that time, the Official Receiver has never briefed the court on the official status of the Corporation.
Pursuant to the demand by one of the Creditors represented by Mr. Agina, the Official Receiver did on 9th October 2014 file a Report on the current status of the Liquidation. I have perused that Report, and it contains gaps and omissions which automatically renders it incomplete. Such shortcomings include:-
The Report does not show whether or not there was a Settlement List of Creditors required under Section 232 of the Companies Act.
There is no indication whether the Official Liquidator took custody of the assets of Nyayo Bus Corporation (In Liquidation).
There is no indication whether Public Examination of the Corporation’s Officials was undertaken.
There are no audited Reports for the over 17 years the Liquidation process has been ongoing.
There are no periodic reports given to the court, since the Winding up was ordered by the court.
It also appears that some Creditors have been paid through the Office of the President in a process which is not made clear to some of the Creditors.
In that regard, the only sensible thing to do is to require the Official Receiver to do the right thing, and to start the entire process afresh; if need be. In this regard, the court makes the following orders and directions:-
The Official Receiver shall within the next 30 days from the date of this Ruling advertise for the meeting of all the Creditors of the Nyayo Bus Service Corporation (in Liquidation).
The said meeting shall take place in the offices of the Official Receiver.
The aim of the said meeting will be to allow all the Creditors to lodge their claim (if any) against the Official Receiver.
The ascertained list of all the Creditors who shall attend that meeting shall be availed to this court on a mention date to be agreed on by the parties.
The Official Receiver shall source the funds for the said advertisements within the offices of the Attorney General, failure whereof the Office of the President.
Orders accordingly.
READ, DELIVERED DATED AND AT NAIROBI THIS 30TH DAY OF JANUARY 2015
E. K. O. OGOLA
JUDGE
PRESENT:
No appearance for the Petitioner
M/s Osicho for the Official Receiver
Teresia – Court Clerk