Sh3 billion at stake as court nullifies Bank of Baroda's administration of Infinity Industrial Park

 

Baroda House that houses Bank of Baroda.[File, Standard]

The High Court has terminated Bank of Baroda’s administration of Infinity Industrial Park after finding that the lender improperly invoked insolvency powers amid a pending multibillion-shilling dispute.

In a ruling rendered by Justice Freda Mugambi on Thursday set aside, annulled and terminated the appointment of joint administrators Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli, declaring it incapable of further implementation or reliance.

The decision comes as the bank faces the prospect of having its movable assets attached and sold to recover a Sh2.996 billion judgment debt owed to Infinity Industrial Park.

The court found that the administration was instituted when the bank’s alleged debt was not yet sufficiently ascertained, given that Infinity had a subsisting judgment against the bank in a related commercial dispute.

“The purported administration, undertaken immediately following the ruling delivered on July 31, 2026 in HCCOMM/E322/2024, constituted and/or amounted to an improper and collateral invocation of statutory insolvency powers, and was inconsistent with the objects and purposes of administration under the Insolvency Act,” Justice Mugambi ruled.

The judge further ordered the administrators to immediately return all property and records taken from the company, including title deeds, leases, logbooks, records, keys, devices, passwords, company seals, statutory registers, bank mandates and contractual documents.

The ruling followed a dispute over Bank of Baroda’s alleged claim of Sh2.070 billion against Infinity Industrial Park.

Justice Mugambi noted that Infinity had obtained a default judgment against the bank on September 8, 2025, while the bank’s attempt to set aside the judgment was dismissed on July 31, 2026.

The judge said the company’s claim against the bank could ultimately equal or exceed the amount the bank claimed from Infinity.

“An insolvency debt therefore must be due and ascertained, and not premature,” the judge said.

Justice Mugambi questioned why the bank moved to appoint administrators barely 10 days after losing its bid to reopen the judgment, when formal proof proceedings were still pending.

“Nothing placed before me suggests that the Company's assets were being dissipated, or that some urgency required the Bank to act before the parties' respective positions were established,” she said.

She concluded that the administration was not warranted at the time.

“Administration is not a neutral or costless step. It displaces the directors from the management of the company and places its assets, records, bank accounts and contracts under the control of the administrators,” the judge said.

The judge also permanently restrained the respondents from continuing, implementing or relying on the impugned administration and ordered restoration of Infinity’s property, rights, management and control.

Separately, the bank is already facing execution of the Sh2.996 billion decree issued in favour of Infinity.

A warrant issued on September 15 directed Moran Auctioneers to attach the bank’s movable and attachable property and sell it by public auction after the required 15-day notice and proclamation process.

The warrant places the amount due at Sh2,996,003,000 and requires the auctioneer to return it to court by October 15, 2026, showing how it was executed or explaining why it was not.