The High Court has cleared National Bank of Kenya (NBK) to take control of leather manufacturer Zingo Investments’ business and assets in a long-running $5.6 million (Sh733 million) debt dispute.
The court ordered Zingo to hand over its premises, management, books, records, keys and other assets to the bank-appointed receiver and manager, Kolluri Venkata Subbaraya Kamasastry.
In the ruling, the court also authorised police assistance to enforce the takeover after rejecting Zingo’s bid to halt enforcement pending an appeal.
“An order is hereby issued restraining the Plaintiff's directors, employees, agents, and any other person acting under its authority from interfering with, obstructing, or impeding the second defendant (receiver) in the lawful discharge of his duties as Receiver and Manager of the Plaintiff's business and assets,” the court ordered in the ruling dated September 1, 2026.
The ruling followed failed mediation and two applications after the court dismissed Zingo’s earlier bid to stop NBK and its receiver from taking over and operating its business.
NBK said Zingo had defaulted since a 2017 consent acknowledging $5.6 million (Sh733 million), while the company argued enforcement would cause loss.
The dispute began after NBK advanced facilities to Zingo to establish a leather factory on property registered as LR No. 9363/98 and provide working capital.
The facilities were secured by charges of $882,354 over LR No. 209/8628 and $2.2 million over LR No. 9363/98, a floating debenture of $794,000 and directors’ guarantees totalling $3.47 million.
The bank’s representative, Paul Chelang’a, told the court that the company has been in default since the December 20, 2017 consent, which acknowledged an outstanding debt of $5,666,000, and has repeatedly made applications to hinder the lender’s recovery efforts.
He also stated that recent valuations set the forced-sale values of the two properties at Sh661 million, which he said was not enough to cover the outstanding debt. He asserts that the Bank has properly issued the required demand and statutory notices.
Furthermore, he argued that this was the company’s sixth attempt to prevent the statutory power of sale, claiming the application was an abuse of court process, the plaintiff remains in default, and there was no sufficient basis for the orders requested.
An earlier judgment says that a 2017 consent consolidated the debt at $5.66 million and provided a further $1.1 million working-capital facility.
In March 2024, the High Court rejected Zingo’s claim against NBK, holding that the company had acknowledged the debt but disputed how funds were handled.
The court said interest and penalty disputes did not justify withholding the principal. In January 2025, the Court of Appeal declined to stop NBK from exercising its remedies.
The latest dispute concerns receivership and emerged after NBK appointed Kamasastry as receiver and manager in August 2025. He took control of the business on September 1 before an interim injunction issued the following day stopped him. That injunction remained in force until Zingo’s application was dismissed on April 30, 2026.
Zingo filed an appeal and sought another injunction, arguing that the appeal could be rendered useless if NBK proceeded with enforcement. It also asked the court to send the dispute to mediation and allow it to amend its plaint.
The court rejected those requests. It said the April dismissal was a “negative judgment” because it did not require either defendant to perform an executable act.
“There is nothing arising from the dismissal order capable of being stayed,” said the judge.
In relation to mediation, the court noted that the dispute had already gone through court-annexed mediation, but a report filed showed that the receiver had declined to participate.
“Mediation is inherently a voluntary process that relies on the parties’ good faith participation. Given the circumstances, referring the case to mediation again would be pointless and only cause delays in resolving the pending applications,” the court said.
Mr Kamasastry sought orders allowing him access to Zingo’s premises and control of its business, assets and affairs. He said employees and director Robert Njoka had prevented him from returning after the April ruling. He also alleged resistance despite police presence and a threat involving a firearm.
Zingo denied obstructing or threatening the receiver. It argued that the April ruling merely dismissed its injunction application and did not authorise a forcible takeover. The company said it remained a going concern and that taking control would cause substantial loss.
The court rejected that position and allowed Mr Kamasastry’s application in full. It said the receiver’s appointment had already been upheld and that the September 2025 injunction lapsed when Zingo’s application was dismissed.
“The Plaintiff’s continued obstruction of the receiver is unlawful and cannot be tolerated,” the court said. It added that the alleged threat to the receiver’s team was “a matter of grave concern” and could lead to contempt proceedings if substantiated.
The court’s final orders require Zingo and its personnel to give Kamasastry unrestricted access to the properties -LR No. 9363/98 and LR No. 209/8628. They are also required to hand over management, assets, books, records, documents and keys, and must not interfere with his duties.
The Officer Commanding Mwiki Police Station, Infinity Police Post or the Officer Commanding any police station in proximity to the Plaintiff’s premises were authorised to assist if necessary.
