In a demand notice dated September 19, AfrAsia has reportedly demanded SBM to pay a $7.5 million (Rs338million) debt claim within 21 days, failure to which it will apply for a liquidation order against the Kenyan lender that acquired Chase Bank in 2018.
At the same time, according to the Kenya’s The Standard newspaper, SBM has announced it will fight Afrasia’s claim. This comes after the country’s High Court on August 13 ordered SBM to pay the sum, ruling that it was responsible for all liabilities of Chase Bank.
According to reports, Afrasia had placed the sum in Chase Bank’s fixed deposit account, earning annual interest of about 2.35%.
Chase Bank sank into receivership on April 7, 2016, days before the investment by Afrasia was to mature on April 18, 2016.
“SBM, which cherry-picked certain assets and liabilities in Chase Bank, had argued in court that the general public was informed about what was retained under Chase,” The Standard reported.
In 2019, Afrasia took the matter to court but the case was referred to arbitration and was ruled in favour of SBM in April 2021.
However, Afrasia appealed to Kenya’s High Court, which ruled in its favour in August this year.
The newspaper added that while Afrasia is pushing for the money, Mauritius-based SBM Holdings, the parent company of SBM Bank Kenya, says they has obtained a stay of execution in respect of the judgment and is in the process of filing an appeal.
“SBM Kenya has since obtained a stay of execution in respect of the judgment and is in the process of filing an appeal,” SBM Holdings said in its half year report filed in Mauritius.
“No provision in relation to this claim has been recognised in these financial statements (of SBM Holdings) as the directors have been advised by the lawyers that the probability of a liability arising is remote.”
This means the legal tussle is far from over even as AfrAsia wants the Rs338 million to be accompanied with $16,645 (Rs750,000) as accrued interest.
“Further, take notice that failure to pay the afore-stated amount shall result in Afrasia Bank Ltd filing for a liquidation order against the company,” read the demand notice.
Original article at The Standard, Kenya
