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BANKRUPTCY: Kenya’s corporate market has in recent past seen several companies opt for liquidation procedures after running out of funds to cover any remaining debts. 

Surprisingly, one name has dominated the scene over these years. Ponangipalli Venkata Ramana Rao has become a dominant player, acting as a receiver manager for over half of companies currently fighting liquidation challenges. 

Companies ordinarily appoint an independent insolvency practitioner to act as a fiduciary for the company to realise the company’s assets and satisfy the outstanding debt of the creditor on whose behalf they have been appointed. 

Available data shows that Rao has consistently been called upon to help secured creditors recover their money from troubled firms. 

In January this year, a court ordered the receiver of Athi River Steel Plant Ltd, which is under receivership over a Sh7 billion debt, to respond to one of the lenders’ requests for information regarding the company’s audit books.

Justice Maureen Odero ordered PVR Rao to respond to various letters sent by Credit Guarantee Insurance Corporation of Africa, which is owed excess of Sh456 million by the steel maker.  However, the receiver denied failing to provide the information. He said he had requested the directors to provide a statement of affairs but he has not received the report. Two weeks ago, Rao, also the Mumias Sugar Company Receiver Manager was taken to task by the Agriculture Senate Committee over claims that he sold scrap metal to Devki Steel Mills Ltd, when he was then Kwale Sugar Factory receiver manager.

Scrap metal

Rao is on record admitting selling scrap metal to Devki Steels Mills Ltd while he was at Kwale Sugar Factory but denied having sold a commercial project to Devki. 

The Committee probing the failed leasing bid by Devki also faulted Rao for failing to publicly advertise the leasing process of the troubled miller – the manufacturer eventually pulled out from the Sh5 billion takeover deal.  Activist Okiya Omtatah recently moved to court seeking to have Ponangipalli  Venkata Ramana Rao removed as the Receiver Manager of Mumias Sugar Company.

He  wants Rao removed by KCB Bank, which put the miller under receivership, on grounds that he is conflicted and incompetent in running the company. 

“I seek a declaration that the KCB Bank Kenya Limited, the Receiver which appointed him, has an obligation to remove him to protect the public interest in the Mumias Sugar Scheme,” Omtatah states in court documents.