Former ARM employees fail to join National Cement in exit pay row – Business Daily
An ARM Cement plant. FILE PHOTO | NMG
A judge has rejected a bid by former employees of Athi River Mining Cement to join National Cement Company (NCC) in a case pending before the court as they fight for their dues.
Thirty former employees wanted NCC to be part of the case, arguing they have learnt that it has acquired ARM.
Justice Linnet Ndolo, however, dismissed the application, saying the former employees can only sue or proceed with a case under administration with the permission of the court or the consent of the administrator.
The cement maker was placed under the administration of PricewaterhouseCoopers (PwC) in August 2018 when its total salary arrears stood at Sh126.9 million.
“No such consent or leave has been demonstrated and this court, therefore, lacks jurisdiction to proceed with the claimants’ application. The said application is consequently struck out with costs in the cause,” the judge said.
The former employees filed the case in 2017 and they filed a new application, saying NCC had acquired ARM and absorbed it under the Simba Cement Brand.
They said they have also learnt that NCC Ltd assumed all assets and businesses of ARM after settling administration expenses.
ARM opposed the case, saying it was brought in violation of Section 560 of the Insolvency Act, which provides that while a company is under administration, a moratorium is placed over all legal proceedings against the firm.
And in case any party wishes to institute or continue with legal proceedings against a company under administration, they must obtain the consent of the administrator or leave of the court.
ARM pointed out that the former employees have not sought the permission of the court or the administrator, making the case a nullity.
ARM was once the second biggest cement maker in Kenya behind Bamburi Cement, but it was put under administration by creditors over debts totalling Sh19 billion.
Its shares were also suspended from trading on the Nairobi Securities Exchange.
Billionaire Narendra Raval of NCC acquired ARM despite a spirited court fight by former owner Pradeep Paunrana and businessman Jaswant Rai.
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