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High Court halts auction of Akshar Industries' assets, citing "improper banking practices" and demanding full account transparency.

The High Court has slammed the brakes on Mayfair CIB Bank’s attempt to auction assets belonging to Akshar Industries, ordering a forensic audit of a disputed Sh260 million loan facility.
The ruling exposes the often opaque relationship between lenders and distressed borrowers, setting a significant precedent for how banks must account for interest, penalties, and loan disbursements before seizing security. The court's intervention comes as a reprieve for the firm, which accused the lender of predatory practices that crippled its operations.
In a scathing assessment, the court criticized Mayfair CIB Bank for "improper banking practices." Akshar Industries argued that the bank had systematically frustrated its business through a series of irregularities. These included the dishonouring of cheques despite available funds and the unauthorized approval of loans that piled debt onto the company without proper consent.
The dispute centers on a lending relationship that began in 2019, involving overdrafts and asset financing. While Akshar acknowledged a debt, they disputed the bank's calculation of the outstanding Sh260 million, arguing that penalty interests were inflated due to the bank's own misconduct. The court agreed, ruling that penalty interest resulting from the bank's errors should be waived.
This judgment serves as a warning shot to financial institutions regarding the enforcement of statutory powers of sale. The court emphasized that lenders cannot simply rush to auction without establishing a clear, indisputable debt figure, especially when their own conduct is in question.
For Akshar Industries, the fight is far from over, but the ruling provides a crucial window to reconstruct the true state of their financesm As the 30-day deadline for the audit ticks down, the banking sector will be watching closely to see what the forensic examination reveals about the hidden costs of credit.
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