Firm to invest Sh2bn in Dubai Bank, court told

A strategic partner is ready to pay more than Sh2 billion to acquire 95 per cent of Dubai Bank Holding, the High Court was told Monday.

Sovereign Financial Holdings, the court heard, had submitted proposals to the Central Bank of Kenya to invest $21,500,000 (about Sh2,214,500,000) in Dubai Bank, which has not been challenged.

Mr Valiveetil Pius Lawrence, who has filed an application in support of another by Dubai Bank depositor Richardson and David Limited, says that if the proposed injection of the money is allowed and large depositors are permitted to convert their deposits into equity, Dubai’s insolvency would be cleared.

This, Mr Lawrence says, will also leave Dubai Bank with a credit balance of Sh3 billion.

Mr Lawrence, who has joined the Dubai Bank suit, is also seeking orders to compel the Kenya Deposit Insurance Corporation (KDIC) to submit a full inventory of all assets it seized from the bank.

He says in a supplementary affidavit in support of Richardson and David Limited that a decision by the corporation to advertise the assets of Dubai Bank confirmed the fears that its sole intention was to strip the bank of all its assets to the detriment of creditors and depositors.

Richardson and David Limited had moved to court seeking to block the liquidation of the bank, which was placed under receivership after failing to meet its banking obligations.

UNAUTHORISED TRANSACTIONS

But Mr Lawrence says, in the application before Justice Erick Ogola, that he was shocked to see an advertisement in the media, in which three motor vehicles belonging to the bank were being sold by the corporation.

“The KDIC’s decision to advertise assets, which have direct bearing on the orders sought by Richardson and David is a clear demonstration of its lack of respect for the court process,” he says.

Dubai Bank founder and chairman Hassan Zubedi has also come out fighting against liquidating the bank, saying some of the allegations against him are false and malicious.

He says the claims that he held executive and non-executive powers at the bank are part of a scheme to back the plan to liquidate it and dispose of its assets.

The Central Bank, which is seeking to recover depositors’ money, has revealed that Mr Zubedi conducted parallel unauthorised transactions, advancing himself and cronies millions of shillings.

The ruling will be delivered on November 13.