KCB Bank has come out on top in a messy contest with construction firm EPCO Builders over the assets of struggling cereals maker Proctor & Allan. The High Court has ruled that the bank’s security interest ranks first, blocking EPCO from selling the same machinery and equipment to recover its own debt.
According to a report in Business Daily published today, the court found that KCB’s floating charge had already crystallised into a fixed charge by the time EPCO’s auctioneers moved in. That timing proved decisive.
EPCO was chasing roughly Sh150 million after an arbitration award linked to a 2014 construction contract. The tribunal had awarded the firm about Sh74.7 million plus costs and interest. In February 2025 the High Court allowed enforcement, and Betabase Auctioneers later proclaimed the company’s plant, machinery and furniture. On paper, EPCO looked close to recovering something.
KCB saw it differently. The bank held an all-assets debenture dating back to November 2013, with a supplemental debenture from October 2015. Those documents covered virtually everything — land, machinery, receivables, the works. By February 2025 the outstanding claim had grown to around Sh4.9 billion. When the auctioneers showed up, KCB stepped in and argued the assets were already charged to it.
The court agreed. It held that default had triggered crystallisation of the floating charge well before the proclamation, turning it into a fixed charge. A proclamation, the judges noted, only preserves property; it does not transfer ownership or create a better title than a prior crystallised security.
How the timeline unfolded
| Date | What happened |
|---|---|
| 1 Nov 2013 | KCB takes the original all-assets debenture |
| 28 Oct 2015 | Supplemental debenture signed |
| 2014 | EPCO and Proctor & Allan sign construction agreement |
| 2023–early 2025 | Arbitration ends with award to EPCO of \~Sh74.7m plus costs and 14% interest |
| 3 Feb 2025 | High Court allows enforcement of the award |
| 20 Feb 2025 | Betabase Auctioneers proclaim the assets |
| 21 Feb 2025 | KCB issues formal demand for roughly Sh4.9 billion |
| 24 Feb 2025 | KCB appoints joint receiver managers |
| 31 Jul 2025 | Justice Njoki Mwangi upholds the receivership appointment |
| Aug 2026 | High Court gives KCB priority over EPCO on the assets |
You can read the earlier receivership ruling coverage here.
The numbers don’t add up for everyone
KCB’s claim sits at about Sh4.9 billion. The assets themselves were valued at roughly Sh1.62 billion — far short of covering the bank’s exposure. Allowing EPCO to sell first would have left even less for the secured creditor. That practical reality clearly weighed on the court’s mind.
Proctor & Allan has been under receivership since early 2025. A separate attempt by the company to challenge the appointment of the receivers was thrown out in July last year. At one point the firm had talked about investor interest and a possible buyout that might settle the KCB debt, but those talks never produced a deal that satisfied the bank. Background on those earlier efforts is available in this earlier report.
What this means in practice
The ruling is a useful reminder of how priority works when a floating charge crystallises. A court decree and a proclamation do not automatically jump the queue ahead of a bank that already holds a crystallised security. For lenders this is reassuring. For judgment creditors and contractors it is a cautionary tale about the limits of enforcement when a prior debenture is in play.
With the assets worth less than a third of KCB’s claim, smaller creditors such as EPCO are unlikely to see much recovery from the same pool of property. The bank’s position remains the strongest in the room.
Read also:KCB Group H1 2026 Profit Hits Sh49.3bn, Beats Co-op Bank
Quick answers
How much is the KCB claim?
Around Sh4.9 billion based on the February 2025 demand.
Why did the court side with KCB?
Because the floating charge had crystallised before EPCO finished its execution process.
Where did EPCO’s claim come from?
An arbitration award on a 2014 construction dispute, later enforced by the High Court.
Is Proctor & Allan still operating under receivers?
Yes. The July 2025 ruling confirmed the appointment of the receiver managers.
What does crystallisation actually mean?
It is the moment a floating charge over general assets becomes a fixed charge over specific ones, usually triggered by default. Once that happens the secured creditor’s rights harden considerably.
The latest decision keeps the assets under the control of the receivers for now and confirms that KCB sits first in line. For anyone else still hoping to recover from Proctor & Allan’s estate, the cupboard looks increasingly bare.