Economy

Arrest warrant issued against Dubai Bank founder

A warrant of arrest has been issued against the founder of collapsed Dubai Bank Hassan Zubeidi for failing to heed a court directive to pay Sh7 million debt he swindled a Nairobi firm.

The High Court deputy registrar Thursday granted a request by Jazira Agencies for arrest of Mr Zubeidi, piling pressure on the Dubai Bank owner who is also under investigation for alleged misuse of depositors’ funds at the collapsed lender.

Mr Zubeidi was in 2010 ordered to pay Sh4 million to Jazira as compensation for a flopped deal that was to see him supply the firm with US dollars.

Justice Wycliffe Mwera found that the Dubai Bank owner had failed to deliver the currency as agreed. The amount has since grown to Sh7 million because of interest.

“This is to command you to arrest the said Hassan Ahmed Zubeidi unless he shall pay the sum as noted together with executing officers’ expenses and fees, if any, to bring the said judgment debtor before the court with all convenient speed,” the arrest warrant reads.

Jazira attempted to attach a number of household items and a car used by Mr Zubeidi in 2011.

The Dubai Bank founder’s son, however, objected the move, arguing that he owned the items that were to be attached. As a result, Jazira only managed to get a court order allowing it to sell  household items and managed to secure a TV, gas cooker and a fridge — which was not enough to recover the Sh4 million.

The firm on Monday sought Mr Zubeidi’s arrest because there are no assets it could find in the Dubai Bank founder’s name.

The Jazira arrest warrant comes as Mr Zubeidi faces possible arrest over the collapse of Dubai Bank.

He has already been grilled by Directorate of Criminal Investigations officers who are expected to make a finding on whether he should be charged with interfering with Dubai Bank savers’ accounts, contrary to the Banking Act.

The Central Bank of Kenya shut down Dubai Bank in August, citing serious cases of parallel banking, a mountain of unsecured loans that were not being serviced, interference with client accounts and a lack of an organisational chart as provided for by the law.

The Kenya Deposit Insurance Corporation, which has been tasked with liquidating Dubai Bank has instituted a civil case against Mr Zubeidi in which it wants to attach his personal assets to recover funds lost in an elaborate scheme he used to enrich himself.

KDIC says in a status report of the collapsed lender that Mr Zubeidi used depositors’ funds to guarantee his private companies some Sh1.6 billion.

The KDIC suit has seen the Anglican Church accuse Mr Zubeidi of forging title deeds for land it bought from him with an aim of grabbing the property.

Dubai Bank has been cited by KDIC for disregarding customer instructions to conduct transfers. The KDIC says the lender failed to remit Sh41 million of clients’ money despite receiving instructions to do so.