Deposit Fund asks the courts to wind up two fallen Kanu-era banks
Posted Tuesday, July 31 2012 at 19:40
The Deposit Protection Fund Board is seeking to wind up two more financial institutions that were put under liquidation in the 1990s during the second round of bank failures under the Moi administration.
The liquidator said on Monday it would make an application in the High Court setting in motion the process of winding up Central Finance (Kenya) Limited and Inter-Africa Credit Finance Co if it meets no objections from creditors.
“We, the Deposit Protection Fund Board, the liquidator…intend to apply to the High Court for the release of the Deposit Protection Fund Board. Any objection you may have to the granting of the release of the liquidator must be notified to the High Court within 21 days,” said part of the notice.
Rose Detho, the director of Deposit Protection Fund Board (DPFB) and veteran statutory manager told Business Daily the announcements were to notify any creditor who may have any claims on the two on the wind-up.
“We are now calling the creditors and if there are no objections then it is just a matter of routine,” said Ms Detho.
Central Finance and Inter-Africa Credit Finance are among 19 financial institutions that are still under liquidation.
According to the disclosures contained in the latest DPFB annual report, a total of 24 banks collapsed between January 1993 and June 2005.
The first round of bank failures was in the mid ‘80s when a number of non-bank financial institutions failures were incorporated into Consolidated Bank.
The third round occurred after the 1997 elections, threatening to take down KCB and National banks that have turned around over the years.
Majority of the banks that collapsed in the last two rounds financed political activities.
In 1993 alone, 10 banks including Trade Bank, Post Bank Credit and Middle Africa Finance were placed under liquidation.
Three collapsed in 1994, another three in 1996, one the following year and five after 2000. Euro and Daima banks are the only failures since 2003.
So far, Nairobi Finance, Diners Finance, Trade Finance, Allied Credit and International Finance have already been wound up after the fund board paid part of the protected deposits.
Ms Detho said if the two are wound up, the protection fund will be left with 17 banks under liquidation.
The fund’s latest annual report notes that as at the end of June last year, a total of Sh1.1 billion had been paid.