[2008-05-09]  Judge stops Stanbic-CFC bank merger
The Stanbic Bank and CFC Bank merger scheduled for June 22, has been stopped.

Lady Justice Roselyne Nambuye issued the orders on Thursday pending the hearing of a case filed by 15 former employees of Stanbic Bank.

The proposed merger would effectively see the formation of a new company to be named CFC Stanbic Bank Limited.

The 15 pensioners have been involved in other legal disputes with Stanbic Bank since 2004, and a ruling on the case was pending before the same judge.

They filed an urgent application last week seeking to have the merger stopped. They applied to have Stanbic Bank and all its agents and servants temporarily restrained from carrying on the merger with CFC Bank or any other institution.

Through their lawyer Mathew Oseko they claim Stanbic Bank would also dispose of its undertakings and liabilities.

They named Stanbic Bank as defendant together with five trustees of their pension and life insurance scheme; Philip Samuel Odera, Maurice Toroitich, Wilson Odadi, Christine Sabwa and Wendy Mukuru.

The pensioners want the bank compelled to disclose its assets and to deposit more than Sh1.1 billion with the High Court as security. They also asked the court to have the bank deposit its business and assets with the court pending determination of the case.

The bank should effect a guarantee or security from another reputable bank that is licensed to conduct business in Kenya and internationally, they say.

They argued that if the merger was allowed to proceed, the bank assets would be owned by a company outside Kenya, which would not be subject to any orders of the High Court.

Justice Nambuye ordered the application filed last week be heard on May 21, in the presence of all the parties.

Source: Copyright © 2008 Standard Group