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Dubai bank chairman's contempt of court case adjourned

29 May 2015, 10:26 Ken Wekesa

Mombasa - A case in which Dubai Bank Kenya Limited chairman, Hassan Zubedi is facing imminent jail term over contempt of court charges was adjourned yet again Thursday by a Mombasa court.

The suspect is said to have failed to honor court sermons in the case he is accused of defrauding Kwanza Estate Limited.

While adjourning the case involving KES 167 million, Mombasa High Court Judge, Justice Mary Kasango lashed out at the bank's counsel, Stephen Mwenesi for causing the adjournment.

"I wish to direct that the matter be set for hearing on June 17. That is the last chance for adjournment of the matter," Justice Kasango said.     

She made her ruling after Dubai Bank Limited lawyer Asige Kiberenge, who was holding brief for Mwenesi, made the application for adjournment for the cross-examination of Zubedi.

The judge regretted that the court has only been able to cross-examine the bank Managing Director, Binay Kumar Dutta.    

Justice Kasango said the matter is of national importance adding that Zubedi has a right to be represented and show cause why he cannot be committed to civil jail through cross examination.     

She directed Zubeidi to convey the new hearing date to his lawyer Mwenesi in good time.

Kiberenge told the court that he was instructed by Mwenesi to make the application for adjournment after being bereaved.

He told the court Mwenesi has lost an aunt who brought him up and the family is set to bury her this weekend in western Kenya.

"Mwenesi will be attending the burial and he informed me he had communicated the same to Kwanza Limited Managing Director, Geoffrey Asanyo's counsel, Philip Nyachoti," Kiberenge told the court.

Kiberenge said that he wished to apologize to the court on behalf of Mwenesi.

But Zubeidi, who was present, had travelled from Cairo and had been notified of his bereavement in advance.  

Kwanza Limited Managing Director, Geoffrey Asanyo's counsel, Philip Nyachoti was represented by Paul Buti who objected to Dubai Bank's application for adjournment.

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He said on March 4 before same court, Mwenesi, without producing a medical report told the court he had broken his right arm.

"On the material day, Zubeidi, the client, was not present in court. Today he is present but Mwenesi is not," he said.  

He said he had expected Mwenesi to seek alternative arrangement due to the gravity of matter to emulate Nyachoti, who had instructed him to represent him after he lost his grandmother.

Buti dismissed claims that they received communication over Mwenesi’s bereavement, adding that the remarks were strange.

He said before leaving his office for the court, he had a chat with Nyachoti twice but nothing of the sort was mentioned to him.

"I am of the school of thought that once you hold brief you have full instructions,’’ Buti pointed out.  

Zubedi was to appear before Justice Kasango to explain why he had disobeyed orders to deposit KES 167 million with interest of over KES 197 million.

This was after Asanyo sued the Bank over the money. Asanyo was represented by Counsel Philip Nyachoti.

The order, which was issued on August 2013, had demanded the Dubai Bank chairman deposit the money within 45 days from March 31, 2013.

Last year, the bank's Director, Dutta had told the court that he had limited jurisdiction in the running of the affairs of the financial institution.

He told Justice Kasango that despite heading the bank, he was not responsible for every decision made by the institution.

The Dubai Bank boss denied claims that he had been served with an order directing the bank to deposit KES 197 million.

Dutta told the court that Kwanza Estate had not served him with the order in question.

“I am not aware of the court order but what I know is that there is an order which was issued by the court to deposit the amount in question in court,” said Dutta.

He told the court that he only acts to the level of powers vested on him and anything beyond that is referred to the board of directors.

Dutta dismissed claims that his resignation from the financial institution will leave a vacuum in the running of the affairs of the bank.

The Dubai Bank boss had told the court that he had already tendered his resignation letter to the institution.

"I am still calling the shots at the bank and I am only awaiting the approval of my resignation from the board of directors before quitting,’’ Dutta told Justice Kasango.

He said his decision to quit is in the hands of the Dubai bank board of directors.   

Asanyo, a former powerful Nakuru Kanu branch chairman, had opened three accounts with the Dubai Bank, one for US dollars, another for Kenya Shillings and the other for sterling pounds.

On March 2012, the company applied for a loan of KES 143 million from the National Bank of Kenya to purchase Watamu Beach Hotel and Kilulu Island in Malindi. Later, the company asked for enhancement of the loan from KES 143 million to KES 160 million and used the properties as security.

In April the same year, the bank agreed to grant the company an overdraft of up to KES 160 million on charge on the properties.

Dubai Bank then received KES 167 million on March 6 and 8, 2013 from Asanyo sent through Housing Finance Company of Kenya (HFCK) as call deposit into the accounts at 18 percent interest.

As the loan transaction was underway, Zubeidi allegedly entered into a different agreement with Asanyo to procure financing arrangements for a project called Talent Youth Academy between the Government and Point Streak Technologies, a Canadian-based company.

The financing was to be procured on or before March 19.

Asanyo gave Zubeidi 2.5 million US dollars (KES 200 million) as commission and negotiation fees for the deal. Zudeidi however failed to secure the financing.

Asanyo instructed him to deposit the money into one of the company’s accounts then remit it to the National Bank for the purchase transaction.

Instead of first depositing the money in one of the Kwanza Estates accounts and then claim from Dubai Bank, they only debited the company’s account with KES 200 million.

This automatically created a huge overdraft in the account that accumulated enormous interests and penalties.

On March, Dubai Bank through Stima Auctioneers gave the company 45 days notice to settle the KES 200 million failure to which they would sell all the parcels of land.

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