The government of Kenya has taken over the management of Royal Media Services(RMS) after media mogul SK Macharia lost his appeal against a court judgment declaring him bankrupt over a 34-year debt.
In a an order recieved on Friday, the Attorney-General’s office issued a bankruptcy receiving order that allowed the State to take over and supervise SK Macharia’s business till his debts are settled.
The Order, which was published on Friday’s Kenya Gazette notice had also noted last year’s Court of Appeal decision that rejected Mr Macharia and his wife’s opposition to being declared bankrupt over a Sh500,000 debt, which has since ballooned to Sh293.4 million.
Royal Media services operations will now be under the supervision of Mark Gakuru, the Official Receiver based at the State Law Office.
Gakuru’s brief includes reviewing the financial statements to establish the liabilities and assets to enable him to start settling the debts owed by the SK Macharia.
“The Official Receiver will prepare a statement of affairs detailing all his assets and liabilities with a view of setting them. The notice has been issued for the benefit of all creditors and captures all his debts, all bank loans, suppliers and any other creditors.” a source at the AG’s office who requested anonymity said.
The order means SK Macharia will lose access to his businesses, bank accounts and property that will be under the watch of the official receiver.
He also risks losing directorship in companies that he and his wife, Purity Gathoni, own, including Royal Media Services – which owns Citizen TV and radio as well as several vernacular radio stations.
Macharia has the option of keeping the Official Receiver at bay by issuing a plan on how he intends to repay all his debts and enter into court-supervised agreements with all the creditors.
According to the law, Mr Gakuru is required to summon a general meeting of the creditors to discuss how to deal with the businessman’s property. Mr Macharia is also expected to provide Mr Gakuru with a statement of his wealth that includes his assets, debts and liabilities as well as securities held by people he owes money.
Mr Macharia lost an appeal, which sought to bar the State from enforcing a 2009 bankruptcy ruling, last year.
He has moved to the Supreme Court to challenge the appeals court decision, but he has yet to secure order freezing the judges’ directives, leading to the placement of the receiving order in Friday’s Kenya Gazette notice.
He lost the three-decade battle to bar businessman Livingston Waithaka, the managing director of Ocean Freight Transporters Company Limited, from declaring him bankrupt for failing to refund him Sh500,000 in a land deal that fell through.