Chase Bank cleared to pursue Carrefour establishment debt
The High Court has cleared Chase Bank, which is in liquidation, to sue the owners of French retail chain Carrefour over a debt of more than 10.5 million shillings.
The lender, which was put into liquidation by the Central Bank of Kenya in 2017, is claiming 10.5 million shillings from Majid Al Futtaim Hypermarkets Ltd for costs incurred in setting up the retail chain’s outlet at the detail in addition to damages for loss of earnings.
The case was filed in August 2017, but following new developments in the receivership by the regulator, Chase Bank Limited (in liquidation) returned to court asking to be allowed to continue the case to recover the debt.
“I have read the pleadings filed here and note that plaintiff’s request is not frivolous or an abuse of legal process,” the judge said. Judge Okwany denied a request by Crossroads to compel Chase Bank to provide security for the charges, in the event the lender’s quest is unsuccessful.
The national finance director of the retail chain, Alaa Ahmed Mahmoud Abdo El-Gindy, had argued that it would be difficult to pursue the costs of the collapsed bank, in case it (Chase Bank) lost the case.
“At this interlocutory stage of the proceedings, the court cannot say that conclusive evidence has been presented to show that the plaintiff will not be able to pay the costs, notwithstanding his current financial situation. I therefore conclude that a security order of the costs may jeopardize the plaintiff’s recovery plan, ”said the judge.
The regulator authorized the liquidation of the assets of Chase Bank, left aside after the takeover by SBM Bank.
Mauritian lender SBM Bank took over 75% of certain assets and liabilities of Chase Bank in 2018. In the deal with Chase Bank, SBM valued the total assets acquired at 69.59 billion shillings, with fixed assets having a fair value of 1 shilling. .25 billion.
The CBK had also ordered the Kenya Deposit Insurance Corporation, the receiver, to begin liquidating the remaining assets, as part of an exercise to recover money for customers who had more than the guaranteed maximum amount that s now stands at 500,000 shillings. .