Dubai Bank chairman Hassan Zubeidi. PHOTO | FILE
By BRIAN WASUNA
In Summary
The banking sector regulator has put collapsed Dubai
Bank’s assets on auction, marking the end of the road for the lender
that was shut down in August last year.
The central bank, through the Kenya Deposit Insurance
Corporation (KDIC), instructed auctioneers to sell office equipment and
other assets that the lender owned in Nakuru.
Valley Auctioneers yesterday held another auction
in Nairobi outside the KDIC godown in Industrial Area following a failed
attempt by Dubai Bank founder Hassan Zubeidi to stop the sale.
The KDIC is, however, yet to confirm whether all
the office equipment has been sold, and whether a 1.5-acre piece of land
that the collapsed lender owned in Upper Hill, Nairobi is among the
assets that have been disposed of.
High Court judge Francis Tuiyott yesterday declined
to issue an order stopping the Nairobi auction following an application
by Mr Zubeidi.
Mr Zubeidi claimed in his application that the KDIC and the Central Bank of Kenya (CBK) were violating an agreement made in court to stop any liquidation until his Court of Appeal suits against Dubai Bank’s dissolution have been determined.
Mr Zubeidi claimed in his application that the KDIC and the Central Bank of Kenya (CBK) were violating an agreement made in court to stop any liquidation until his Court of Appeal suits against Dubai Bank’s dissolution have been determined.
“The intended sale goes against the earlier
commitment by parties in the suit to suspend all actions and proceedings
while awaiting the determination of civil appeals 66 and 67 filed in
the Court of Appeal on July 14, 2016. The intended auction amounts to
premature liquidation of Dubai Bank,” Mr Zubeidi claimed.
But the CBK and the KDIC yesterday denied entering
into any agreement to suspend the collapsed lender’s liquidation,
insisting that the auctions have been carried out in accordance with the
Kenya Deposit Insurance Act of 2012.
The Act allows the KDIC to liquidate collapsed
lenders found incapable of reopening. The CBK placed Dubai Bank under
receivership on August 14 last year after flagging the lender for breach
of several CBK regulations. The lender was also at risk of exposing
depositors to a Sh3.1 billion loss.
Mr Zubeidi in his application says that the KDIC
did not issue a 14-day notice as required by law before auctioning Dubai
Bank’s assets.
The KDIC, however, maintains that stopping it from
liquidating the bank would amount to unlawfully interfering with its
mandate as described in the Constitution. The CBK holds that Mr Zubeidi
ceased having any authority or legitimate interest in Dubai Bank when it
was placed under receivership last August, hence has no authority to
address the court as regards stopping liquidation of the collapsed
lender.
Consider offers by local and foreign investors
“There is no commitment or agreement by the KDIC to
suspend its statutory mandate under the KDIC Act of 2012. Mr Zubeidi
through the application seeks to arrogate himself judicial powers to
dictate to the parties and the court his own perceptions and
expectations. Mr Zubeidi has no legitimate interest in the subject
matter of the application (Dubai Bank),” the KDIC and the CBK say in
court filings.
Mr Zubeidi still wants the High Court to compel the
KDIC and the CBK to consider offers by local and foreign investors who
had shown interest in resurrecting Dubai Bank. Failure to disclose
ownership and source of funds has seen the banking industry regulator
turn down seven proposals by foreign and local firms that had expressed
interest to inject capital and revive the collapsed Dubai Bank in May.
No comments :
Post a Comment