NAIROBI: The ongoing liquidation of the collapsed Dubai Bank has taken a twist after a depositor moved to court last Friday seeking orders to stop its closure.
Richardson and David Limited, a depositor with the bank, filed a petition before the Milimani Law Courts, wants the court to stop the Kenya Deposit Insurance Corporation and the Central Bank stopped from dismantling the bank’s ICT system.
The plaintiff claims the CBK and KDIC violated section 53(1) of the Kenya Deposit Insurance Act. They should therefore be stopped from winding up the bank’s seven branches in Nairobi, Mombasa and Nakuru.
Justice Eric Ogola certified the application urgent and ordered its dispensation and be admitted for exparte. He did however issue orders stopping the liquidation process as had been prayed for by the plaintiff.
“The plaintiff is hereby granted leave to serve the defendants and other parties who may wish to participate in these proceedings including creditors, debtors, shareholders and directors of Dubai Bank Kenya,” Ogola ruled. The depositor was ordered to notify the CBK, KDIC and other parties through a newspaper advertisement. The case will be heard in presence of all parties on Thursday.
Meanwhile, the Retirement Benefits Authority on Friday announced it has approved the appointment of Dennis Kimanzi to dissolve Dubai Bank Kenya Staff Retirement Scheme. This followed a resolution by the scheme’s board of trustees on September 3, which was received communicated to the RBA ON September 15.
“Any party with interest, claims and/or objections should forward them to the liquidator within 14 days from the date of this liquidation notice,” the RBA said in a Gazette notice last Friday.
Dubai Bank was placed under a one-year receivership on August 14 for consistently failing to meet its daily cash reserve ratios since July 14, with penalties for non-compliance having accumulated to Sh5.4 million by the time the decision was made.
KDIC, which was appointed the receiver manager, however successfully recommended to the CBK on August 24 the small-sized lender be wound up – a week after taking over its affairs.
On September 25, KDIC chief executive Aggrey Bett said it had only paid out Sh20 million to about 300 of the about 7,000 depositors. Bett said they have set aside Sh123 million for the compensation of the 1,230 account holders with deposits of more than Sh100,000.
“We are ready to compensate them (account holders). But only 300 have come, we don’t know where the others are,” he said.Payment for the process, which began early last month, are being made through individuals’ bank and M-Pesa accounts provided by the claimant.
