THE High Court in Dar es Salaam has ordered the Director of Deposit Insurance Board (DIB), Mr Isack Kihwili, to pay 145.9bn/-to Coast Textiles Limited in execution of court decree issued about seven years ago against FBME Bank Limited.
Judge Amir Mruma gave such order last Friday against the DIB Director, the respondent, who was appointed by the Bank of Tanzania (BoT) as liquidator of FBME, after granting an application for execution filed by Coast Textiles, the applicant.
"The applicant has the right to execute the decree of the court. I grant the application and order the liquidator of FBME Bank to satisfy the decree," the judge declared.
DIB is an institution charged with protecting deposits in banks and deposit taking financial institutions in the country and is under BoT.
In his affidavit to show cause, seeking dismissal of the application, the respondent had stated that since the FBME was being wound up, any execution or attachment cannot be put in force against its assets, as such move would be inconceivable and against the law.
However, in his ruling the judge pointed out that there was no material evidence presented to show that the FBME was insolvent and there is nowhere shown that such commercial institution was not capable of paying debts to its creditors.
The judge noted further that there were no reasons provided by the liquidator to show why the bank in question was being wound up and thereafter placed under liquidation and that its operating licence was
revoked.
It was further noted that the FBME was placed under liquidation on May 8, 2017 at a time when the court had already delivered the judgment on the matter in favour of Coast Textile.
Referring to Article 107A (1) of the Constitution of the Tanzania, the judge pointed out that the judiciary shall be the authority with final decision in dispensation of justice.
"Therefore, the Court decree is final, thus cannot be subjected to scrutiny or ranking by the liquidator. I decline to make a finding that the applicant cannot execute the court decree," the judge ruled.
The company filed the application for execution, requesting the sum of 145.94bn/- be realised from the DIB, the Liquidators of FBME Bank, default of which the Director of Board be held accountable.
Coast Textiles, a local company, decided to seek the Court intervention after failure by FBME, whose operations were taken over by the BoT, to implement the judgment given by Judge Aloysius Mujulizi in 2015 on such payments.
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Records show that the local company has been in court corridors since 1997, which is 24 years, pursuing her rights against the FBME, which was later taken over by the BoT having being implicated with money laundering crimes to protect Tanzanian customers.
Coast Textiles was at all material times a customer of FBME since 1997 and had been granted an overdraft facility by Trust Bank, through its branch in Kenya. But the amount involved, which is about 600,000 US dollars, was not credited to Coast Textiles suppliers in India.
A dispute arose relating to repayment of the overdraft, leading Delphis Bank, the predecessors of FBME to consolidate two credit facilities. Coast Textiles claimed that the concentration of the two credit facilities granted by the bank was wrong and in breach of the agreement.
By deed of transfer from Delphis Bank (T) Limited, predecessor in title of FBME dated June 28, 2001, the latter bank's interest in Coast Textiles were transferred to Loan and Advances Realisation Trust, the predecessor in title to Consolidated Holding Corporation (CHC).
Consequently, the CHC, exercising powers granted to it under the law, transferred the landed property, including plant and machinery as mortgaged by debenture in favour of FBME which latter fraudulently sold the property to Middle East Properties Limited.
The said Middle East Properties subsequently transferred the property on Plot No. 3 LOT 20, Nyerere (Pugu) Road to Empire Properties Limited and subsequent to Five Star Investments Limited. The transfer happened while the matter was in court.
