A manufacturer of plastic packaging bags whose operations was affected when the government  imposed a ban has suffered further blow after an audit revealed that a bank who is pushing for its liquidation over debt has been overcharging interest rates accruing to Ksh 53 million.

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Hi-Plast Limited is now seeking recourse against I&M Bank at the Commercial court accusing the creditor of illegally and fraudulently overcharging interest against a loan it secured in June 2015.
The company wants an administrator appointed to manage the firm in the pendency of the suit.
“The secured creditor(I&M) has so far shown crystal interests of illegally disposing off the securities held by it in form of parcels of land at a price lower than the market  value based on a valuation done there years ago,” Hi-Plast’s lawyer, Eddy Orinda, told the court.
According to the lawyer, one of the land parcels owned by Hi-Plast, L.R No209/8611/2 situated  along Runyejes Rd, Industrial Area is able to settle all its liabilities if disposed of at the current market  value as contrary to the outdated value proposed by I&M.
Hi-Plast is asking the c court to rescue it through administration rather  than liquidation as it is concerned about settling all its debts by disposing off only LR No. 209/8611/2 at its current market value but I&M “illegally wills to dispose it off for a price far below its market value with abandon.
‘The petitioner is objective to anew and current valuation of the securities held by I&M bank as it is confident that the Runyejes Rd property can clear  all its liabilities solely,” Orinda explained.
Fraudulent interest
He said that the fact that the creditor has  been overcharging illegal and fraudulent interest on the charge account ad the willingness to  dispose of the securities at a price  lower than the market value shows that the bank has “bad faith and are only interested in clogging the petitioners right to redeem its property.
Orinda has accuse the bank of mischief  and attempting to dispose  the property cheaply and illegally.
 He said that unless the court stops the bank and appoints and administrator, the latter may dispose off the securities at a cheaper price or lower price than the market value.
“Precipitated by the creditors behaviour of overcharging illegal and fraudulent interest and also on the verge to dispose off the securities based on outdated valuation, an administrator is reasonably likely to smoothen  the process by settling all due debts and retaining to the petitioners what belongs to it,” the lawyer told court.
Hi Plast has already acquired a certificate of the Official Receiver  which its prays be appointed as the administrator.
The company also wants the court to compel the bank to table a “true and proper account of its charge account.”
It has also asked the court to restrain the bank  from continuing to charge any kind of interest on the charge account until the hearing and determination of the petition.
Order of adminsitration
Apart form I&M Hi-Plast is also  indebted against Savichem Africa Ltd, Aprirose Trading Ltd, Sarrchem International Ltd and Somachem Ltd.
The company director Mahesh Dodhia states in an affidavit filed in court states that he owes I&M bank a disputed outstanding loan of Ksh373,506,975.75 anchored upon a charge instrument dated June 23 2015 and against which the bank holds  a plot in Westlands, Nairobi, and another in Industrial area  as securities.
Hi-plast board of directors  held a special meeting on December 16  2018 in which a resolution was passed to apply to court for an order of administration.