The Court of Appeal has stopped halted the liquidation of Dubai Bank, until
a ruling at the High Court that favoured the bank against Central Bank of Kenya
is heard and determined again.
CBK is seeking to upend a ruling by Justice Eric Ogola, who adjourned
the liquidation for 60 days.
The Central Bank issued the closure of Dubai Bank on grounds of
its failure to pay its debtors and for breaching regulatory rules.
The moneylender 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”.
CBK has been advised by Justice Ogola to consider a proposal by a
British Virgin Islands company to invest an estimate of 2.2 billion shillings
into Dubai Bank to save the financier from liquidation.
Judges Alnashir Visram, Wanjiru Karanja and Hannah Okwengu said that the
liquidation of the bank will remain frozen until the ruling of the matter,
which will be delivered on the 16th of March this year.
Following stark orders, the second respondent in the case, Kenya Deposit
Insurance Corporation (KDIC), is authorized to pay a sum of 100,000 shillings insured
money to the creditor.
KDIC also argued that the orders from Justice Erick Ogola were unwarranted
as they left depositors and creditors of the financial lender in jeopardy of losing
their cash.
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