The move by Equity Bank to place investment firm Transcentury and its subsidiary East Africa Cables should concern any one who cares about Kenya.
Equity Bank this week announced that Muriu Thoithi and George Weru of PriceWaterhouseCoopers (PWC) have been appointed joint receivers of Transcentury with effect from June 16th 2023.The bank also appointed Thoithi and Weru as joint administrators of East Africa Cables.
In an advertisement placed on local dailies, Equity Bank stated that “ The powers of director (of Transcentury) in terms of For with the company’s business and assets no longer apply. Any person who purports to hold, receive, use, or attempt to buy or sell, contract or otherwise deal with the company without the prior written consent of the receivers will be acting in contravention of the law and will be liable to legal action.”
This move should alarm the private sector and the government alike. If the trend continues, Kenya’s economy will sink deeper.
In Kenya, no company ever survives receivership. The receiver managers act like butchers slaughtering a cow. From Nakumatt to Karuturi, the story is the same. Being placed under receivership is like a death sentence because the receiver managers never bother to restructure or revive a business, they are only there for the carcass.
Companies like Transcentury are the lifeblood of the economy and letting Equity Bank kill an indigenous business like Transcentury is an attack on Kenya’s self interest.
It would be unforgivable if we let Equity Bank kill Transcentury, perhaps Kenya’s best known investment clubs. The Transcentury story inspired millions of Kenyans into group investments, popularly known as chamas.
TransCentury is not your ordinary company. The company is one of the best indigenous investment companies and has created jobs and wealth for thousands of kenyans.
Currently, the laws that govern receiverships are designed to only cater for creditors instead of finding avenues to protect the financially distressed firmsI
f not reversed, the move by Equity Bank will lead to job losses and send thousands of kenyan families into poverty.
It is worth noting that no company put into administration by Equity Bank has ever survived. It seems the bank is an undertaker.
Kenyans would be watching keenly to see if Equity Bank succeeds in killing indegnous enterprises such as Transcentury and East Africa Cables