Former Dubai Bank chairman entangled in Sh1bn row

Hassan Zubeidi, founder of the collapsed Dubai Bank. PHOTO | FILE 

Posted  Wednesday, November 30   2016 at  21:43

Hassan Zubeidi, founder of the collapsed Dubai Bank, is locked in a Sh1.1 billion dispute between a Khartoum-based contractor and the government of South Sudan related to a botched electrification project in the troubled nation.

Mr Zubeidi has obtained a court order freezing Sh1.1 billion payable to Khartoum’s Active Partners Group (APG).

He claims that the firm owes him the amount from a loan he extended it in 2010 to undertake the power project.

The former Dubai Bank chairman says APG’s managing director Mohammed Fagir borrowed $6 million (Sh600 million) from him and $5 million (Sh500 million) from another businessman—Jalal Hussein Diab.

Mr Zubeidi holds that he was also assigned the Sh500 million APG borrowed from Mr Diab hence is entitled to Sh1.1 billion in total.

Dubai Bank was placed under receivership by the Central Bank of Kenya (CBK) in August last year for flouting several banking regulations.

Mr Zubeidi is fighting the lender’s closure alongside Dubai Bank’s second-largest depositor—Richardson & David.

The Court of Appeal is set to deliver a ruling on whether to compel the CBK to consider an offer by Virgin Islands firm Sovereign
Financial Holdings to revive the collapsed Dubai Bank by injecting Sh2.2 billion capital.

APG was last year awarded Sh4.4 billion compensation for the botched power project after South Sudan pulled the plug citing a lack of funds owing to civil war and major corruption scandals that depleted its coffers.

But APG held that the government of South Sudan should have taken out a bank guarantee to ensure the project would proceed.

The firm has since attached Sh3.6 billion from various bank accounts and oil that South Sudan intended to export.

Mr Zubeidi has now obtained a court order barring APG and Mr Fagir from maintaining less than Sh1.1 billion in their bank accounts.

Some of the money is saved in two bank accounts APG holds in Abu Dhabi Islamic Bank in the United Arab Emirates while the rest is being held by the Khartoum firm’s advocates—Mungu & Company Advocates.

APG has, however, asked Justice Francis Tuiyott to dismiss Mr Zubeidi’s suit, arguing that the terms of the 2010 loan provided that any dispute arising between the parties would be resolved in Khartoum’s courts.