Kenyan businesses, small and large, are the lifeblood of the nation’s economy. However, lurking in the shadows, like a predatory feline eyeing its prey, is the antiquated beast known as receivership.
It’s high time we awaken from our slumber and amend the receivership laws in Kenya to save our businesses from the clutches of doom.
You wake up and a good company is gone. You ask what happened and you are told it has been placed under receivership. You ask why and you are told that creditors and suppliers have to be paid and the only way is to kill the company and “salvage” whatever remains.
So, when a business fails to pay its debts on time, the only solution is to murder it using “the law”? Erase it totally from the face of the earth so that creditors can have a field day. Of what value is such a law? What happens to all the others depending on the company down the value chain?
Laws are supposed to defend, protect, grow, and enhance. Any law that kills something is not worth being a law. To me, receivership laws are like the funeral home of businesses. Where businesses in the Intensive Care Unit are taken there before they die, killed, and buried without “family members” ever knowing.
If you ask me, this law is like the “Shakahola” of businesses in Kenya. Where businesses go with the hope of surviving and flourishing, only to be killed and buried in the forest like village dogs. It is a law whose time for review has come.
So many gigantic businesses have been killed by this law. Talk about Tuskys. More than 5000 jobs were lost. The economy lost one of the biggest taxpayers and thousands of suppliers lacked a place for their products and services. Look at what happened to Nakumatt. Over 30,000 jobs were lost in Kenya, Uganda, and Tanzania. Why? So that creditors can get their money? Did they even get the money? Then what is the whole point behind receivership?
And now we are waking up to the news that TransCentury too has been placed under receivership. Why are these receivership orders being dished out like sweets at a kiosk? Don’t you think it is time to start thinking about the harm this law is causing the economy, businesses, and those who depend on it?
Receivership, as it stands, is akin to quicksand for struggling businesses. Once ensnared, it becomes nearly impossible for them to escape. The current laws fail to provide a realistic and fair chance for recovery, leaving businesses sinking deeper into financial oblivion. It’s time we stop treating businesses like hapless gazelles caught in the jaws of a merciless predator.
The amendment is the key to transforming receivership from a funeral march into a symphony of redemption. We must introduce provisions that focus on nurturing and reviving businesses rather than simply selling off their assets. A receiver should be an orchestra conductor, skillfully harmonizing the various stakeholders, creditors, and management, to orchestrate a recovery strategy that breathes new life into struggling enterprises.
The current rigidity of receivership laws stifles creativity and innovation in the business resurrection. We must imbue the amended laws with flexibility, allowing for tailored solutions that fit each unique business scenario. Whether it’s renegotiating debts, restructuring operations, or injecting fresh capital, the maestro’s baton of flexibility will enable businesses to dance their way back from the brink of destruction.
An essential addition to the amended receivership laws should be the provision of a temporary shield of the moratorium. This protective cloak will grant businesses a breathing space to regroup, restructure, and rebuild without the constant fear of aggressive creditors swooping in for the final blow. With this shield in place, businesses can weather the storm and emerge stronger, like a phoenix from the ashes.