Charterhouse statutory manager stopped from moving Sh152m

Crescent Construction has secured a temporary order stopping Charterhouse Bank statutory manager from transferring Sh152 million to the Ministry of Roads.

Constitutional and judicial review division Judge, Lady Justice Jeanne Gacheche, directed that pending the hearing of a petition filed by the construction firm, the bank’s statutory manager Rose Detho should not interfere with the funds held in the troubled bank.

The construction firm has sued the Central Bank of Kenya senior manager Detho who was appointed the statutory manager of Charterhouse Bank.

Treasury is sued as the oversight authority.

Crescent Construction has accused the statutory manager of failing to discharge her duties diligently by declaring a moratorium on depositor’s payment by Charterhouse Bank.

Lady Justice Gacheche said the construction firm had shown that there was intention by the statutory manager to pay the money to the Roads ministry without the involvement of the company’s directors.

The judge allowed the application seeking the preservation of the money on grounds that amount is held on account of the depositor, Crescent Construction Company.

Lawyers Paul Muite and Edward Oonge told the court that the statutory manager has not discharged her duties in accordance with sound banking and financial principles in deciding to remove the money belonging to the contractor.

The lawyers further submitted that Detho ought to have known that the declaration of the moratorium would deprive the petitioner of their deposits held by the bank.

Crescent wants CBK to pay it Sh3 billion in general damages, saying that the role of the statutory manager was not to close the bank but to manage it professionally to protect the proprietary interests of the bank’s customers.

“Depositors’ funds ought to have been taken care of by CBK appointed manager and not used to pay creditors,” submitted the contractor.

The firm said it was apprehensive the statutory manager “intends to use the deposits in satisfaction of an unsecured guarantee given by the bank to the Ministry of Roads in the absence of any basis in law or contract.”

Security bond

The ministry wants the money paid to it to honour a security bond of Sh144,984,000, which is disputed by the construction firm on account of premature termination of a road construction contract.

Crescent alleges that the statutory manager had threatened to pay the ministry on the strength of a bond it gave the bank on behalf of the contractor.