FBME Bank to pay creditors after release of withheld funds

DAR ES SALAAM: THE US Government has committed to releasing funds withheld from FBME Bank Limited, enabling payment to creditors, including Coast Textile Limited, owed 145bn/-.

This development follows a court decree issued nearly nine years ago. State Attorney Edwin Wediro informed the High Court in Dar es Salaam on Monday that the Director of the Deposit Insurance Board (DIB), Mr Isaack Kihwili, has engaged with the US Embassy in Tanzania to lift the sanction on the frozen funds by the end of this year.

State Attorney Edwin Wediro told the High Court in Dar es Salaam on Monday that Director of Deposit Insurance Board (DIB), Mr Isaack Kihwili, has communicated with the US Embassy in Tanzania on the possibility of lifting the sanction on the withheld funds.

“The information I have is that the freezing order will be lifted by the Government of United States of America by the end of this year and all creditors will be paid,” the State Attorney told Judge Salma Maghimbi when execution proceedings relating to the decree came for mention.

He explained further that the DIB Director and Liquidator of the FBME Bank in Cyprus held a meeting last month to discuss various issues, including the updates on the liquidation process.

The State Attorney informed the court that another group of depositors of the bank in the remaining 70 percent of claims will be paid by September, 2024.

He was, however, quick to explain that Coast Textile Limited will not be among the beneficiaries in the September list.

Also read: DIB extends time for FBME depositors, creditors to submit claims

He, therefore, requested the court to set another mention date pending the outcome on the decision by authorities in the US to lift the ban on FBME Bank money, which are being withheld on suspicious of involvement in money laundering claims.

Before adjournment of the matter, Advocate Joseph Rutabingwa, who represents Coast Textile Limited, reminded what the court had directed the DIB Director to communicate with the US government on existence of court decrees against FBME Bank, which are four. The judge adjourned the proceedings to October 1, 2024 for hearing.

In the case, Coast Textiles Limited seeks court’s intervention after FBME Bank, whose operations were taken over by the Bank of Tanzania (BoT), failed to implement the judgment given by Judge Aloysius Mujulizi in 2015.

The company applied for execution of the judgment, requesting the sum of 145.94bn/- be realised from the DIB, the liquidators of FBME, the default of which the Director of Board be held accountable.

On May 20, 2022, Judge Amir Mruma ordered the DIB Director, who was appointed by BoT as liquidator of FBME, to pay such amount after granting an application for execution of the decree filed by Coast Textiles Limited.

The judge pointed out that as per section 3 of the Civil Procedure Code, the decree of the court is the formal expression of an adjudication which so far as regards the court expressing it, conclusively determine the rights of the parties with regard to the matter.