Equity Bank takes over troubled packaging firm amid Sh193m debt

Ponangipalli Venkata Ramana Rao. [File, Standard] The High Court has barred directors of a struggling packaging manufacturer from obstructing administrators appointed by Equity Bank, which took over the company's operations following a Sh193 million debt. Equity Bank, as a secured creditor, appointed Ponangipalli Venkata Ramana Rao and Swaroop Rao Ponangipalli as joint administrators of Nes Poly Pack Limited on October 30, 2025, handing them control of the firm. According to court records, the administrators formally assumed control on November 5, 2025 and informed the public through a newspaper notice on November 6. However, just three days later, on November 8, the company's directors and employees allegedly forced their way into the Isinya, Kajiado County premises, disrupting operations. They reportedly began removing assets, finished goods and raw materials to unknown destinations. Justice Josephine Mongare heard that these actions made it impossible for the administrators and their staff to carry out their mandate. In court, the joint administrators urged urgent protection from interference, arguing that the administration process and creditors' interests were at risk. "It is necessary, in the interest of justice, that this application be treated as urgent and heard on a priority basis, and that the orders sought be granted to allow the administrators to proceed without risk of violence or disruption," they stated. The administrators reported the alleged violent actions to Isinya Police Station. In response, Nes Poly Pack Limited's directors sought to block the administrators' appointment, asking the court to stop them from taking control. The court reportedly issued interim orders on 6 November, restraining the administrators from assuming control pending the hearing of the directors' application. The joint administrators challenged this order, describing it as erroneous, noting it referred to 30 October 2025, a date before the case was filed. "An obvious error is apparent in the record as the order refers to a date when this case had not yet been filed," Mr Paul Munyao, counsel for the administrators, told the court. The administrators maintain that Equity Bank validly appointed them on 30 October under a floating debenture granted by the company over its assets. Court documents show Nes Poly Pack executed a Sh100 million floating debenture in March 2019 and a further Sh93 million facility in June 2021, secured against company assets, bringing the total debt to Sh193 million. In an affidavit, Mr Swaroop Rao Ponangipalli warned that without court intervention, the company and its creditors risk severe financial harm. "The court should issue a temporary injunction to prevent the company and its creditors from suffering irreparable loss that cannot be compensated by damages," he stated. He argued that commercial certainty and justice demanded that administrators be allowed to perform their statutory mandate without interference. "The balance of convenience tilts in favour of the administrators and the secured creditor to enable them to take over the business and avert unilateral actions by the directors, which could undermine the administration," Rao added. After considering the application, Justice Mongare granted orders restraining the directors from evicting the administrators, disrupting operations or interfering with their functions pending the dispute's resolution. "Pending the hearing and determination of this application, this court orders that the directors or their agents are restrained from evicting the administrators, disrupting the company's operations, interfering with their functions, removing goods or property, or in any other way obstructing the company's business," the judge ruled.

Equity Bank takes over troubled packaging firm amid Sh193m debt

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