The Anglican Church has joined a high-stakes land battle pitting the embattled Dubai Bank founder Hassan Zubeidi against the bank’s liquidator — the Kenya Insurance Deposit Corporation (KDIC).
The church on Monday filed a suit in a Nairobi court accusing Mr Zubeidi of forging titles for the plot that is located in Limuru Township with the aim of taking possession of the property.
Paul Kuria, an Anglican clergyman, says in court papers that he and other residents of Limuru bought the land from a firm associated with Mr Zubeidi — Africa Energy — in 2005 and have the original title deeds for the property.
The church says it moved to court after it was informed that copies of the title deeds had been found in a safe in Mr Zubeidi’s office, exposing it to the risk of losing what it had bought from the businessman.
Rev Kuria is the chairman of High Peak View Estate, a community-based organisation that is seeking to join a suit the KDIC filed to freeze Mr Zubeidi’s assets, including the South East Limuru land parcels.
“High Peak View Estate’s membership has a purchaser’s interest in the properties that have been occupied for a decade.
“The certificates for the said property were acquired fraudulently. High Peak View’s members hold the original titles and are entitled to be registered as proprietors of the land,” Rev Kuria says.
The clergyman, however, does not clarify whether all members of High Peak View are part of his congregation.
High Peak View says it acquired 142 plots of land from Africa Energy, each ranging between 0.02 and 0.05 acres, for Sh24 million through Maestro Properties, an agency that has also been linked to Mr Zubeidi.
A total of 437 plots were carved out of Africa Energy’s land.
Mr Zubeidi has opposed the inclusion of Rev Kuria and his organisation in the suit, and told the court that he will have filed his response to the application by November 6 when the suit comes up before Justice Eric Ogola.
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 lack of an organisational chart as provided for by the law.
The financial sector regulator then followed the KDIC’s recommendation that the bank be liquidated barely two weeks after it went into receivership.
The KDIC later moved to court seeking to freeze the bank’s assets and Mr Zubeidi’s accounts, arguing that they were acquired through irregular transactions and illegal use of depositors’ funds.
The liquidator holds that the Limuru land titles were among the 334 it found in Mr Zubeidi’s safe, and that the Dubai Bank founder has been using them to secure illegally advanced loans from the lender.
Rev Kuria says High Peak View has since been unable to get new title deeds for the subdivided pieces of land and that it was to sue Africa Energy and Maestro Properties when the CBK shut down Dubai Bank. Depositors stand to lose Sh1.2 billion they had in the bank.
The clergyman says the church realised there was a problem with the land when a director of Africa Energy refused to sign documents allowing High Peak View members to obtain title deeds for the subdivided plots despite the group having completed payment.
The director is, however, not named in the documents.
“After pushing Maestro Properties for release of the documents, Maestro sometime in 2014 informed High Peak View members at a meeting that the delay was occasioned by the fact that one of the directors of Africa Energy had refused to sign the transfer documents.
“Before members could gear up and take legal action, we came to learn from the media that Dubai Bank was under liquidation and that title documents for various parcels of land, including ours, had been found in Mr Zubeidi’s office,” the clergyman says.
The KDIC started its pursuit of Mr Zubeidi after establishing that Dubai Bank’s total liabilities stand at more than Sh2 billion or twice the amount depositors had in their accounts.
The liquidator has also established that the lender has insufficient assets to settle the liabilities and refund savers who risk losing their savings.
The KDIC names the five firms Mr Zubeidi used for illegal transactions as Africa Energy, Maestro Properties, Suleiman Enterprises, Kamp General and Kemu Salt Packers.
The firms have, however, denied having any association with Mr Zubeidi, and claim the suit is a disguised attempt by the KDIC and the CBK to sanction illegal acquisition of their property.
“It is the duty of KDIC to produce evidence that Mr Zubeidi has an interest in these companies. He has no interest in any of the five companies,” the firms insist.
The KDIC has, however, questioned why Mr Zubeidi defended the firms and the properties they hold if he has no stake in them.
The deposits insurer also wants Mr Zubeidi to show how he managed to print bank statements from the collapsed lender four days after it was shut down.
“The bank was put under receivership on August 14 but Mr Zubeidi was able to print statements on August 17. We need to investigate how this was printed and we need to counter this kind of documentation,” KDIC lawyer Ochieng Oduol told Justice Ogola on Monday.
The regulator has also revealed that Mr Zubeidi may face criminal charges over his bank’s collapse and that he has been interrogated by police.
The KDIC has separately published a report showing that Mr Zubeidi used depositors’ funds to guarantee his private companies Sh1.6 billion.
Dubai Bank’s second largest depositor Richardson and David has also filed a suit against the KDIC seeking to stop liquidation of the bank on grounds that the process began hurriedly and that no attempt to rescue the lender was made.
The KDIC maintains that no institution, even the High Court, has the right to stop the liquidation process once it has been initiated.