Struggling Bank Of Baroda On The Spot For Harassing Borrowers

The Kenyan branch of Baroda Bank has come under attack following claims that a group of rogue directors are harassing borrowers. Baroda which is rumored to be dwindling in fortunes, is allegedly putting up crude methods to ensure the bank doesn’t collapse.

A Saravanakumar is said to be leading a gang of other directors in the bank; Ravi Kant Pathak and Rameshchandra Chunilal Mehta. According to claims made by popular blog in Kenya, the axis of evil, known within the banking circles as the ‘Three Maharaja Musketeers’ brag that they are untouchable as they have the direct blessings of the bank’s Chairman Dr. Hasmukh Adhia and Shri Sanjiv Chadha, Managing Director & CEO. “We were told to use any means necessary to ensure the Kenyans branch won’t collapses after years of mismanagement, and Dr Adhia himself gave us the blank cheque to do whatever is necessary. Anyone with a problem should call Sanjic Chadha or the chairman himself. We are just working on their instructions,” bragged the Saravanakumar during a staff meeting, the blog reports.

The management is accused of colluding with judicial officers to frustrate disgruntled customers who’ve lodged heaps of suits against the bank. Suspiciously according to the publication, most rulings on cases against the bank, are often made in favor of the bank.

The MD A. Saravanakumar and directors Ravi Kant Pathak and Rameshchandra Chunilal Mehta are said to be openly encountering magistrates and judges in the head office where they allegedly come to pick ‘bags’.

In mid December, a judge is said to have spent three hours in the afternoon at the bank’s headquarters where he met with the three directors.

According to sources within the bank, by the time the meeting ended, an officer of the bank was sent to the strong room where Kenyan shillings 7.7 million in US currency was taken to the MD’S office, and thereafter, the judge exited the premises with a heavy package. The interesting twist is that a week later, the was hearing a case pitting a disgruntled client against the bank. On 23 December, the accused judge called for a hearing and only allocated five minutes for the disgruntled clients lawyer to put in submissions.

The lawyer argues that the bank had even filed in submission based on fake documents, and even provided a police statement where a lawyer, under OB 44/16/2021 FILED at Central Police Station claimed his commissioner of oaths stamp was faked by the bank since he had never represented the bank. the judge, fueled by the package he had received at the banks head office, ignored the glaring crime, since filing fake documents in court is a crime, but went ahead and asked the bank to file fresh submission, and he ignored the fake ones.

He thereafter gave notice that he will rule on the case on 4 January. Shock of the litigants as on 29th December, the judge sent an email from a holiday resort in Mombasa where his stay with his family was facilitated by the bank, that he is issuing a ruling within ten minutes on the same day. Unsurprisingly, he ruled in favour of the bank, and instructed administrators to take over the business.

A source at the bank says an junior employee was the one sent to pay for the judge’s holiday at the coast and the three directors pushed the judge to issue a ruling while the judge was sipping pinacoladas by the beach because they wanted their year to end on a high note, so that they can report back to India that they had managed to take over property worth billions to shore up the banks dwindling cash base.

According to Central Bank of Kenya, commercial banks, mortgage finance company and microfinance banks are required to always observe the daily CRR requirement of 3 percent and monthly average CRR of 4.25 percent. But Bank of Baroda, is struggling to maintain a daily cash reserve of 3 percent and their reserve is now at 0.3 percent. This means, if someone withdraws Sh 100 million from the bank, no other customer will be able to withdraw anything from the collapsing bank. Could this be clear indicator for collapse?

Separately, Bank of Baroda has taken over the operations of Thika Nursing Homes and Thika School of Medical and Health Sciences after temporary orders that barred administrators from controlling the college were discharged by the High Court.

A notice published in the newspapers indicated that joint administrators —PVR Rao and Swaroop Rao — were now in charge of the operations of the institutions, after orders issued by Justice Alfred Mabeya in November were discharged on December 29.

“Accordingly, all matters relating to the company shall be referred to the joint administrator,” the notice stated.

The proprietor of the college and the hospital went to court in November and obtained temporary orders, barring the joint administrators from conducting any business related to the school over a debt owed to the lender. The two were appointed as joint administrators by the bank on November 22.

Through senior counsel Tom Ojienda, the proprietors said they had planned to restructure the debts with the bank but faced persistent challenges due to slow economic growth occasioned by the Covid-19 pandemic.

He said the lender has been piling pressure on the institution and issuing threats meant to paralyse the operations of the school, forcing the proprietor together with its sister institution, the Thika Nursing Home, to move to court for protection.

He said the institution has the ability to repay its debt and had indeed repaid Sh15 million only for the lender to appoint the joint managers.

The college said it had opted to borrow money from other banks to repay its loan but Bank of Baroda allegedly frustrated the bid by listing it with the credit reference bureau (CRB).

“It was thus very clear that the 3rd Respondent (Bank) was never interested in having the Applicant to repay its facility but preferred to maliciously frustrate and handicap it to fail in its financial obligations so that the 3rd Respondent can eventually take over its businesses through proxies,” Prof Ojienda submitted.

In September, the court issued an order directing that parties explore an out-of-court settlement and the parties met to discuss the repayment plan. The parties later drafted a proposed joint restructuring plan dated September 27, for consideration by the bank.

The court heard that soon after taking over the administration of the college, the administrators fired all the teaching staff, compromising the education of the students, mostly youths and risking their future.