Court orders former Trust Bank bosses to pay Sh2.6bn

Two former Trust Bank directors have lost a bid to stop the Deposit Protection Fund Board (DPFB) from attaching their property to recover Sh2.6 billion, which they were found to owe the collapsed bank.

The Court of Appeal has dismissed an appeal by Ajay and Praful Shah against a 2013 judgment in which the High Court had found them guilty of embezzling Sh241 million from Trust Bank.

After loading of interest and penalties to the amount, the directors were ordered to pay Sh2.6 billion.

The two directors had asked the Appellate Court to stop DPFB from collecting the sums because they had planned to contest the High Court judgment, and that they would suffer if they won the appeal after paying the colossal sum to DPFB.

But justices David Maraga, George Kariuki and Jamila Mohammed ruled that DPFB was in a position to refund the Sh2.6 billion in the event that the Shahs’ appeal was successful. They added that the Shahs had deliberately twisted facts regarding the suit, hence didn’t deserve the orders.

The decision by the Court of Appeal now means that the DPFB can attach the Shahs’ assets to recover the Sh2.6 billion, which Trust Bank’s clients lost when the institution collapsed.

The Shahs had failed to inform the court of admissions they made of insider loans which they did not repay to Trust Bank.

“We think if the appeal is successful, DPFB can refund the sum. It is also our finding that an applicant must show candour and must not mislead the court by deliberately distorting material facts. The applicants do not on account of this deserve the exercise of our discretionary power,” said the judges.

DPFB had accused the former directors of dishonesty, arguing that they had lied to the High Court that the insider loans had been repaid.

The High Court had found that the two directors ran the bank knowing of an intention to defraud customers, who lost billions when the bank collapsed in September 2001.