First Atlantic Bank has asked the Commercial Division of the High Court in Accra to formally liquidate Kenpong Travel and Tour Limited. The bank aims to recover an outstanding judgment debt of GHS 2,549,969.28 from the travel company. This legal action comes after a nearly four-year-long failure by Kenpong Travel to pay a court-ordered debt.
The bank filed its petition under the Corporate Insolvency and Restructuring Act, 2020 (Act 1015). This Act allows creditors to seek the winding up of companies that cannot pay their debts. First Atlantic Bank wants the court to order the sale of Kenpong Travel's assets to settle the outstanding amount. The company, owned by businessman Kennedy Agyapong, has been in a long legal dispute with the bank.
This case highlights broader concerns about corporate debt enforcement in Ghana. Businesses facing financial distress often struggle to meet payment obligations, impacting the financial sector. Data from the Bank of Ghana regularly shows a portion of bank loans classified as non-performing. This petition illustrates how financial institutions resort to legal measures when other avenues for debt recovery are exhausted. Such actions can affect business confidence and access to credit for other companies.
Court documents reveal First Atlantic Bank's argument that Kenpong Travel cannot pay its debts as they become due. The bank initiated legal action in 2019 against Kenpong Travel and five other parties. The High Court ruled in the bank's favor on August 15, 2022. Despite this judgment, the debt, plus accrued interest, remains unpaid.
First Atlantic Bank alleges that Kenpong Travel has made nine attempts to delay paying the judgment debt. These attempts included legal applications for stays of execution, some reaching the Supreme Court. All such applications were unsuccessful. The bank further claims Kenpong Travel has not provided a credible repayment plan or acceptable collateral for the debt. The petition also raises questions about Kenpong Travel's financial health and the quality of documentation used for the original loan. The Lands Commission could not register the loan's security due to deficiencies.
The bank is requesting several specific court orders. It wants the court to wind up Kenpong Travel under Act 1015. It also seeks an order to sell the company's assets to cover the debt and interest. Additionally, the bank asks the court to prevent the company's directors from interfering with or selling its assets. This case will likely attract considerable public and business scrutiny. This is due to the company's profile and its owner.
If the court approves the liquidation, an insolvency expert will manage Kenpong Travel's affairs. This expert would assess the company's assets and debts. They would then oversee the process of paying creditors according to Ghana's insolvency laws. The High Court will schedule a hearing for the petition soon. Kenpong Travel and Tour Limited has not yet publicly commented on the winding-up petition.