Binay Dutta, Dubai Bank of Kenya managing director. PHOTO | FILE
By BRIAN WASUNA, bwasuna@ke.nationmedia.com
In Summary
- Dubai Bank says its chief executive Binay Dutta left the country on May 11 in suspicious circumstances.
- The Central Bank is investigating the integrity of a guarantee that Mr Dutta issued for a share sale involving Tunasco Insaat, a Turkish firm whose co-owner wants the bank wound up for refusing to pay him Sh52.8 million from the transaction.
Dubai Bank managing director Binay Dutta has fled the
country in the middle of a Central Bank of Kenya investigation into his
role in a suspect share sale guarantee scheme that is now threatening
to bring down the lender.
The bank revealed Mr Dutta’s flight in a Nairobi court where
it is seeking to stop a winding-up petition filed by a Turkish
businessman.
Dubai Bank says in papers filed at Nairobi’s
Milimani Commercial Court that Mr Dutta travelled to India with all his
belongings on May 8, the day he was to appear before the board of
directors to respond to queries on the share sale scheme, leaving behind
a handwritten request for 25 days relief.
“On May 12, Mr Hassan Zubeidi (the bank’s chairman)
received a handwritten note from Mr Dutta’s driver requesting for
leave. By May 11, Mr Dutta was already gone. His driver reported that Mr
Dutta had in fact packed his belongings and delivered them to a
shipping company in Nairobi,” Dubai Bank’s acting managing director Adam
Ali says in the court papers.
“It is suspicious why Mr Dutta would leave the
country as he did before his request for leave was granted. I am
wondering whether he feared that proceedings would be filed against
him,” Mr Ali says.
The CBK is investigating the integrity of the
guarantee that Mr Dutta issued for a share sale involving Tunasco
Insaat, a Turkish firm whose co-owner wants the bank wound up for
refusing to pay him $544,900 (Sh52.8 million) from the transaction.
Sevket Tunc, a Turkish businessman, accuses Dubai
Bank of refusing to pay him for his stake in Tunasco, a company he
co-owned with his partner Abdulwalli Shariff.
Dubai Bank, however, insists that it cannot honour
the guarantee documents because they neither bear a company seal nor its
chairman’s signature and that it suspects the said deal to have been a
scheme by Mr Dutta, Mr Shariff and Mr Tunc to defraud it of funds. The
guarantee was issued to Mr Shariff.
Dubai Bank has in the past three years been
fighting to disprove claims that its clients risk losing billions of
shillings to dodgy book and record keeping.
Dubai Bank filed the suit against Mr Dutta on May
20, a day after the ultimatum for settlement of Mr Tunc’s debt expired.
Mr Tunc is yet to respond to the petition.
The CBK has joined the suit as an interested party,
pointing to the regulator’s concern that depositors’ funds may be at
risk. It has filed a notice appointing Njoroge Regeru and Company
Advocates to act for it.
Justice Eric Ogola issued a restraining order
stopping Mr Tunc from initiating winding-up proceedings against Dubai
Bank until the suit is heard and determined. The case was adjourned to
give the CBK and Mr Tunc time to respond to the application.
The parties are expected to appear in court on June 9 for a hearing.
Mr Dutta, who is an Indian national, had indicated
in his request for leave that he was going back to India to prepare for
his daughter’s wedding but Dubai Bank now says there was no
justification to leave before the request was approved, and before the
letter was delivered to Mr Zubeidi.
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