Introduction and Background
1. This ruling determines the application dated 19th January 2024 filed by the Official Receiver, acting as Liquidator of Xetova Services Limited (in liquidation), the respondent.
2. The application seeks:
i. An order compelling the directors/shareholders to furnish a Statement of Financial Position within 14 days;
ii. That failure to comply attracts penalties under Sections 433(8) and (9) of the Insolvency Act, 2015;
iii. That further non-compliance amounts to contempt, warranting arrest and sanctions under Sections 28 and 29 of the Contempt of Court Act, 2016.
3. It is supported by the affidavit of Beatrice Osicho, Deputy Official Receiver, and was served upon the directors as directed by the Court on 13th February 2025. No response has been filed to date, despite service, as evidenced by the Affidavit of Service on record, and the application is therefore deemed unopposed.
Determination
4. It is undisputed that a liquidation order was issued on 12th October 2023 and that the Official Receiver was appointed as Liquidator of the respondent company. Under Section 433(1) of the Insolvency Act, directors are required to submit a statement of the company’s affairs upon request. It provides as follows;
“If the Court has made a liquidation order or appointed a provisional liquidator in respect of a company, the Official Receiver may require some or all of the prescribed persons to make out and submit to the Official Receiver a statement of affairs relating to the company”.
5. The Liquidator has demonstrated repeated, unanswered demands for this information. Failure to comply attracts sanctions under Section 433(8) and (9) of the Act, namely, a fine not exceeding Kshs. 500,000/= and a further fine of Kshs. 50,000/= for each day the default continues. The application is therefore merited and allowed.
Final Orders
6. The directors/shareholders of Xetova Services Limited (in liquidation) shall furnish the Official Receiver with a Statement of Financial Position within fourteen (14) days from the date hereof.
7. Failure to comply shall attract the penalties provided under Section 433(8) and (9) of the Insolvency Act, 2015 and thereafter the court shall issue further orders should the non-compliance persist.
8. The costs of this application shall be in the cause.
It is so ordered.
DATED, SIGNED AND DELIVERED IN MOMBASA
THIS 19TH DAY OF MAY 2025.
F. MUGAMBI
JUDGE
1. This ruling determines the application dated 19th January 2024 filed by the Official Receiver, acting as Liquidator of Xetova Services Limited (in liquidation), the respondent.
2. The application seeks:
i. An order compelling the directors/shareholders to furnish a Statement of Financial Position within 14 days;
ii. That failure to comply attracts penalties under Sections 433(8) and (9) of the Insolvency Act, 2015;
iii. That further non-compliance amounts to contempt, warranting arrest and sanctions under Sections 28 and 29 of the Contempt of Court Act, 2016.
3. It is supported by the affidavit of Beatrice Osicho, Deputy Official Receiver, and was served upon the directors as directed by the Court on 13th February 2025. No response has been filed to date, despite service, as evidenced by the Affidavit of Service on record, and the application is therefore deemed unopposed.
Determination
4. It is undisputed that a liquidation order was issued on 12th October 2023 and that the Official Receiver was appointed as Liquidator of the respondent company. Under Section 433(1) of the Insolvency Act, directors are required to submit a statement of the company’s affairs upon request. It provides as follows;
“If the Court has made a liquidation order or appointed a provisional liquidator in respect of a company, the Official Receiver may require some or all of the prescribed persons to make out and submit to the Official Receiver a statement of affairs relating to the company”.
5. The Liquidator has demonstrated repeated, unanswered demands for this information. Failure to comply attracts sanctions under Section 433(8) and (9) of the Act, namely, a fine not exceeding Kshs. 500,000/= and a further fine of Kshs. 50,000/= for each day the default continues. The application is therefore merited and allowed.
Final Orders
6. The directors/shareholders of Xetova Services Limited (in liquidation) shall furnish the Official Receiver with a Statement of Financial Position within fourteen (14) days from the date hereof.
7. Failure to comply shall attract the penalties provided under Section 433(8) and (9) of the Insolvency Act, 2015 and thereafter the court shall issue further orders should the non-compliance persist.
8. The costs of this application shall be in the cause.
It is so ordered.
DATED, SIGNED AND DELIVERED IN MOMBASA
THIS 19TH DAY OF MAY 2025.
F. MUGAMBI
JUDGE