By PAMELA CHEPKEMEI
KENYA: Former directors of the collapsed Trust Bank have been ordered to pay Sh1.5 billion to the Deposit Protection Fund.
The High Court in Nairobi ruled that two former directors Ajay Shah and Praful Shah are liable to pay the fund’s board the amount, being customer’s cash at the bank before it collapsed.
Ajay and Praful were the executive directors of Trust Bank Ltd. “The respondents had a responsibility to the depositors. Upon their failure to act responsibly, they became liable,” said Justice Erick Ogolla.
The judge ruled that the money was siphoned out through a non-existent company.
The judge allowed the case by the Deposit Protection Fund through lawyer Desterio Oyatsi to recover the cash from the two former directors.
The judge said the two were custodians of trustees of depositor’s funds but the cash was withdrawn through a non-existent account without a proper channel sanctioned by the bank.
The former directors further misrepresented to the creditors and to the court, in the scheme of arrangement that the withdrawals of funds were done pursuant to a valid loan transaction between the bank and Trust Capital Services Ltd.
There was no loan or overdraft application by Trust Capital Services Ltd as alleged by the two businessmen in court, the judge added.
Ogolla found that the two were liable for loss of depositor’s money. He said evidence was placed by the fund showing that in a space of seven days in 1998, there were massive withdrawals from Trust Bank Ltd.
