DIB reveals reasons behind 145bn/- payment delay

TANZANIA: THE Director of Deposit Insurance Board (DIB), Mr Isaack Kihwili on Wednesday revealed factors contributing to delay of execution of decree of 145bn/- payments, including possible decision of authorities in America to withhold large sum of FBME Bank Limited on money laundering suspicion.

Mr Kihwili told Judge Salma Maghimbi upon appearing before the High Court to explain why he has not satisfied the decree issued in favour of Coast Textile Limited nine years ago that they have started communicating with authorities in America to lift the sanction on the withheld funds.

“What we are doing at the moment is to communicate with authorities in America to lift the sanction on FBME Bank money, which are being withheld on suspicion of involvement in money laundering,” he explained.

The DIB director told the court that they have started effecting prepayments to depositors and the Creditors Inspection Committee has been formed and has met twice to commend the payments.

“On April 19, 2024, the Committee recommended payments for 500 depositors. On May 22, 2024, the Committee also met and approved payments for 352 other depositors on which 30 per cent of their claims have been settled,” he explained.

“We are waiting for other creditors to submit their claims. The procedure available requires all depositors to be paid first by 100 per cent before resorting to other creditors, including the decree holder, Coast Textile Limited,” the DIB Director said.

ALSO READ: DIB boss ordered to appear in court in settlement case

Mr Kihwili informed the court further that they have entered an agreement with the liquidator of FBME Bank Branch in Cyprus to share the proceeds after collection of money from different sources, most of which is being withheld through Cyprus, wherein Tanzania will receive 12 per cent.

The DIB director also explained that they had agreed with the Cyprus liquidator to have an evaluation every six months to identify the level of money collected.

He said that they are also planning to meet next month for another evaluation before receiving the next disbursement from Cyprus. Judge Maghimbi advised the DIB director to provide to the relevant authorities in America a list of creditors of FBME Bank with court decrees, who at the moment are four, including Coast Textiles Limited.

She said that a court decree cannot be subjected to money laundering claims and that will facilitate speedy release of funds to settle their claims.

“We have not encountered any disrespect of court orders from any foreign government. I believe, if you tell them that we have failed to pay some of the creditors possessing court decrees, they will understand,” the judge advised. On his part, Advocate Joseph Rutabingwa, for Coast Textile Limited, also supported the advice given by the court to the DIB director.

However, the advocate also could not agree with the position given by Mr Kihwili that his client was not entitled to the payments until all others are paid.

ALSO READ: BoT to pay larger depositors of FBME

He told the court that his client was ranked after payments to secured creditors, if any and not otherwise. The judge gave the DIB director up to July 5, 2024 to report to the court on the outcome of settlement of the decrees following the advice given by the court.

Coast Textiles Limited decided to seek court’s intervention after the failure by FBME, whose operations were taken over by the BoT, to implement the judgment given by Judge Aloysius Mujulizi in 2015 on such payments. 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.

Related Articles

Back to top button