Dubai Bank Directors Abdul Hafedh Zubeidi and Prof Wilson Hassan Nandwa before a Nairobi court where they were charged over alleged money laundering at Milimani law courts on Thursday February 4, 2016.
BY SAM ALFAN.
Customers of embattled Dubai Bank can now have a sigh of relief after the Court of Appeal stopped the liquidation of the bank.
The court ruled that the bank will not be liquidated as per a ruling made at the lower court.
Central Bank of Kenya (CBK) sought to overturn a decision by Justice Eric Ogola suspending the liquidation of Dubai Bank for 60 days.
Judge Ogola had earlier directed CBK to consider a proposal by British Virgin Islands Company to inject $21.5 million (Sh2.2 billion) into Dubai Bank to save the lender from liquidation.
In its application, Richardson & David want to stop Dubai Bank’s liquidation saying some of the top depositors in its staple are willing to convert their deposits into equity, a move they believe could raise an additional Sh1 billion.
Judges Alnashir Visram, W. Karanja, and H. M Okwengu ruled that pending a ruling in this matter, to be delivered on March 16, 2016, “the liquidation of the banks is hereby frozen.”
The judges gave the order on the strength of consent by the parties in the suit.
It was also ordered that the second respondent in this case, Kenya Deposit Insurance Corporation is at liberty to pay Sh100, 000 insured money to the depositor.
The Central Bank ordered the closure of Dubai Bank over failure to pay its debtors and flouting regulatory rules.
The lender had on August 14 been put under receivership following “violations of banking laws and regulations, including failure to maintain adequate capital and liquidity ratios as well as provisions for non-performing loans and weak corporate governance structures”.
