The Kenya Tea Development Agency (KTDA) has withdrawn a case it had filed against the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) over the closure of Chase Bank.
The agency had argued that it is a major stakeholder in Chase Bank with deposits of Sh2 billion belonging to small-scale tea farmers. Regulators placed the mid-sized Chase Bank under receivership in April 2016 after an unexplained loss of billions of shillings.
The withdrawal of the suit comes weeks after CBK announced it had received an offer from Mauritius’s SBM Holdings for the acquisition of certain assets and liabilities belonging to Chase Bank.
The tea agency had argued that CBK and KDIC had failed to involve them in talks with potential investors that had been invited to acquire a piece of the bank through an Expression on Interest (EOI) by April 21, 2017.
KTDA was aggrieved that though discussions were ongoing, the process was taking longer than expected and that they were likely to lose all their savings totalling Sh2,009,841,377, should the receivership period lapse before a substantive decision is made.
They had also sought orders directing CBK and KCID, to allow them to participate in the ongoing discussions with the shortlisted bidders of Chase Bank. The central bank wants to find a strategic investor for Chase but has not specified how big the stake it seeks to sell.
In May, CBK said 12 parties, including local and foreign banks, had expressed interest in the bank, which has no association with JP Morgan Chase & Co.
Also in May, SBM Holdings said it was bidding to buy a stake in Chase Bank.
In November 2016, SBM Holdings acquired Kenya’s Fidelity Bank for a token payment of Sh100 and said it would inject Sh1.45 billion of fresh capital into it.