Background and Introduction
1. The petitioner, Li Wei, brings this petition in his capacity as the director of ORIENTAL HERBAL COMPANY LIMITED, a company duly incorporated under the Companies Act (Cap 486) on 12th July 1993.
2. According to the petitioner, the company was established to undertake a range of objectives, including overseeing clinical preparation, acquiring clinical facilities, ensuring financial sustainability, and delivering quality healthcare services. However, the company’s operations were severely disrupted beginning in 2019 after entering into a licence agreement with KARSAN RAMJI AND SONS LIMITED for business premises located along Lower Kabete Road, directly opposite Sarit Centre.
3. The petitioner states that the company’s business was significantly impacted by the COVID-19 pandemic, resulting in its inability to meet rent obligations. Consequently, the company accrued rent arrears of KShs. 3,662,831/=, which it has no ability to settle. Further, the business has not recovered over the past three years, has ceased normal operations, has no employees, and has relocated to a cheaper premises solely to facilitate the process of winding up.
4. The petitioner avers that the company is insolvent and unable to continue operating in its current state. He therefore urges the Court to intervene and issue an order for the liquidation of Oriental Herbal Company Limited and that the Official Receiver be appointed as the liquidator of the company.
Analysis and Determination
5. I have considered the petition, the supporting affidavit of Li Wei, and the documentary evidence adduced. The petitioner has demonstrated that ORIENTAL HERBAL COMPANY LIMITED was duly incorporated on 12th July 1993 under the Companies Act (Cap 486). The extract of the company’s CR12 as at 6th May 2025 confirms that the company had three directors, among them Li Chuan, who passed away on 12th February 2024 as evidenced by the death certificate issued by MP Shah Hospital on 21st February 2024.
6. The company’s audited financial statements for the year ending 31st December 2023 show a loss of Kshs. 203,857/=, consistent with the petitioner’s averment that the company has suffered persistent financial hardship, particularly in the aftermath of the COVID-19 pandemic. This is further corroborated by the petitioner’s assertion that the company has not been operational for the last three years, has no employees, and is in rent arrears of Kshs. 3,662,831/= owed to the landlord, Karsan Ramji and Sons Limited.
7. Further, a director’s resolution dated 13th June 2025 evidences a formal decision by the board to liquidate the company. This resolution complies with the requirements for initiating voluntary liquidation proceedings under the Insolvency Act.
8. Section 393 which provides that a company may be liquidated voluntarily if the members pass a resolution to that effect. In such a case, the company may be liquidated under the supervision of the Official Receiver or a licensed insolvency practitioner. Voluntary liquidation may be initiated when the directors form the opinion that the company is unable to pay its debts as they fall due and that liquidation is the most appropriate course of action.
9. The evidence before this Court demonstrates that the company is insolvent and has no realistic prospect of meeting its financial obligations. The directors’ resolution and the consistent pattern of losses, rent arrears, and operational inactivity support the petitioner’s assertion that the company can no longer continue its operations.
Disposition
10. From the totality of the evidence and the applicable law, I am satisfied that the petitioner has established sufficient grounds to warrant the grant of an order for voluntary liquidation.
11. Accordingly, I make the following orders:
i. A liquidation order is hereby issued in respect of Oriental Herbal Company Limited.
ii. The Official Receiver is appointed as the liquidator of the company.
iii. The costs of the petition shall be costs in the liquidation.
iv. This liquidation order shall be served upon the Official Receiver within the next seven (7) days
1. The petitioner, Li Wei, brings this petition in his capacity as the director of ORIENTAL HERBAL COMPANY LIMITED, a company duly incorporated under the Companies Act (Cap 486) on 12th July 1993.
2. According to the petitioner, the company was established to undertake a range of objectives, including overseeing clinical preparation, acquiring clinical facilities, ensuring financial sustainability, and delivering quality healthcare services. However, the company’s operations were severely disrupted beginning in 2019 after entering into a licence agreement with KARSAN RAMJI AND SONS LIMITED for business premises located along Lower Kabete Road, directly opposite Sarit Centre.
3. The petitioner states that the company’s business was significantly impacted by the COVID-19 pandemic, resulting in its inability to meet rent obligations. Consequently, the company accrued rent arrears of KShs. 3,662,831/=, which it has no ability to settle. Further, the business has not recovered over the past three years, has ceased normal operations, has no employees, and has relocated to a cheaper premises solely to facilitate the process of winding up.
4. The petitioner avers that the company is insolvent and unable to continue operating in its current state. He therefore urges the Court to intervene and issue an order for the liquidation of Oriental Herbal Company Limited and that the Official Receiver be appointed as the liquidator of the company.
Analysis and Determination
5. I have considered the petition, the supporting affidavit of Li Wei, and the documentary evidence adduced. The petitioner has demonstrated that ORIENTAL HERBAL COMPANY LIMITED was duly incorporated on 12th July 1993 under the Companies Act (Cap 486). The extract of the company’s CR12 as at 6th May 2025 confirms that the company had three directors, among them Li Chuan, who passed away on 12th February 2024 as evidenced by the death certificate issued by MP Shah Hospital on 21st February 2024.
6. The company’s audited financial statements for the year ending 31st December 2023 show a loss of Kshs. 203,857/=, consistent with the petitioner’s averment that the company has suffered persistent financial hardship, particularly in the aftermath of the COVID-19 pandemic. This is further corroborated by the petitioner’s assertion that the company has not been operational for the last three years, has no employees, and is in rent arrears of Kshs. 3,662,831/= owed to the landlord, Karsan Ramji and Sons Limited.
7. Further, a director’s resolution dated 13th June 2025 evidences a formal decision by the board to liquidate the company. This resolution complies with the requirements for initiating voluntary liquidation proceedings under the Insolvency Act.
8. Section 393 which provides that a company may be liquidated voluntarily if the members pass a resolution to that effect. In such a case, the company may be liquidated under the supervision of the Official Receiver or a licensed insolvency practitioner. Voluntary liquidation may be initiated when the directors form the opinion that the company is unable to pay its debts as they fall due and that liquidation is the most appropriate course of action.
9. The evidence before this Court demonstrates that the company is insolvent and has no realistic prospect of meeting its financial obligations. The directors’ resolution and the consistent pattern of losses, rent arrears, and operational inactivity support the petitioner’s assertion that the company can no longer continue its operations.
Disposition
10. From the totality of the evidence and the applicable law, I am satisfied that the petitioner has established sufficient grounds to warrant the grant of an order for voluntary liquidation.
11. Accordingly, I make the following orders:
i. A liquidation order is hereby issued in respect of Oriental Herbal Company Limited.
ii. The Official Receiver is appointed as the liquidator of the company.
iii. The costs of the petition shall be costs in the liquidation.
iv. This liquidation order shall be served upon the Official Receiver within the next seven (7) days