Ever wondered what it means when you hear a company has been placed under administration?

Section 522(1): The objectives of the administration of a company are:(a) to maintain the company as a going concern; (b) to achieve a better outcome for the company’s creditors as a whole than would be the case if the company were liquidated (without first being under administration);(c) to realise the property of the company in order to make a distribution to one or more secured or preferential creditors.

Example: East African CablesIn June 2023, Equity Bank sought to recover about KSh 2.2 billion from East African Cables. The High Court placed the firm under administration, giving it protection from creditors while administrators explored recovery options.

Appointment

Example: Appointment at EACablesThe court appointed joint administrators to run the company, blocking any debt recovery or asset seizures as they worked on a plan.

Court check

Moratorium (protection)

Example: Legal shield at EACablesWhile under administration, creditors like Equity Bank could not auction properties or sue until courts later cleared the way in late 2024 and 2025.

Control

Example: Control at EACablesThe administrators ran daily operations and began seeking new investors, with the first creditors’ meeting held in August 2025.

Administration ends when: