BY SAM ALFAN.
Directors of the collapsed Charterhouse bank have lost in their bid to revive it.
They had sought orders directing Central Bank to provide them with details of a report which informed it’s closure.
Three High Court judges Hedwig Ong’udi, Chacha Mwita, and Mugure Thande turned down the request saying there was no sufficient ground to warrant issuing the orders sought.
“Having carefully considered the application, responses, submissions, the Constitution and the law, we determine that the application for access to the management report cannot be allowed, it is hereby declined and dismissed. Costs being discretionary”, judges said in their decision.
The report in dispute is a management report dated May 6, 2021. It details grounds for recommending liquidation.
Two directors on behalf of the bank, Sanjay Shah and Manoj Shah wanted full details concerning the alleged violation of the Banking Act.
They also sought dates, time, places and persons allegedly involved in the offence, which led to the closure of the bank.
The bank was placed under statutory management in 2006 and later closed over claims of malpractices including tax evasion and money laundering.
The judges also noted that the directors did not comply with the procedures required in the Access to Information Act, while seeking information from CBK but instead moved to court.
“The interim relief sought, if granted, would partially but finally determine a significant component of the suit at this interlocutory stage. We take the inescapable view that there are no special circumstances herein to warrant the grant of the orders sought. We say so fully aware that although the right of access to information should not readily be denied, it is clear to us that given the circumstances of this case, the Applicants will still have an opportunity to argue their case during the hearing and cross examine witnesses on this issue which has also been raised in the suit, so that the court can make a fair determination after hearing all parties”, said the judges.
The collapsed lender had protested the appointment of the liquidator, saying it was made in bad faith given that the alleged severe violations were not stated.
They further claimed that for the last 15 years during which Charterhouse was under statutory management, they have never been given notice of the severe allegations, as directors, or an opportunity to address any of the alleged violations.
They have maintained that the lender never had any liquidity problems and CBK had refused to hand over Charterhouse to its lawful directors despite a restructuring agreement.
