This archive report was first published on 12 September 2019.
On September 10, 2019, consultancy firm PriceWaterhouseCoopers (PwC) rejected a Sh1.3 billion bank guarantee by tycoon Jaswant Singh Rai that the court demanded to stop the sale of ARM Cement to industrialist Narendra Raval.
The guarantee, equivalent to 20 per cent of the Sh6.5 billion bid price, was part of the conditions set by the Court for the continued freeze of the sale to National Cement Company, where Mr Raval is the lead shareholder.
According to documents seen by Business Daily, the guarantee was turned down because it expires in nine months, exposing the administrators if the court process drags on for longer. PwC was also concerned that the guarantee has not provided to cover costs and damages if the consortium loses the case.
Lawyers representing the consortium of Rai Group and Mr Paunrana, former ARM chief executive and top owner, accused PwC of taking sides, arguing that terms of its guarantee were similar to that of National Cement.
ARM Cement was put under administration last August by some of its creditors over a Sh19 billion debt and its shares were suspended from the Nairobi Securities Exchange.
Stanbic Bank, which funds ARM Cement operations, has threatened to freeze funding due to the uncertainty surrounding the sale.
