[2008-06-04]  Big win for Stanbic, CFC in merger deal
Stanbic Bank has cleared two legal hurdles for its merger with CFC Bank after paying security deposits for two ongoing cases against it, lawyers said. The High Court had ordered Stanbic Kenya, owned by South Africa’s Standard Bank, to deposit KSh200 million as security until the resolution of a lawsuit by former customer Industrial Plant East Africa Ltd. The bank also had to deposit another KSh532 million for a separate suit filed by 15 former Stanbic employees. "We’ve complied with all the laws as ordered by the courts," Githu Muigai, a lawyer for Stanbic confirmed. Stanbic has received all the regulatory approvals to buy a 60 percent stake in CFC Bank, whose assets were valued at KSh43.3 billion as of the end of December, last year. Lawyer Matthew Oseko, who represents the workers and the plant, confirmed that the money had been deposited at the court. "We have no problem now with Stanbic, because they have deposited their money as a security," Oseko said. The planned company, to be renamed CFC/Stanbic Holdings, would be Kenya’s fourth largest bank. In the alternative, the bank was to provide a guarantee from either Barclays Bank of Kenya, Standard Chartered Bank or Kenya Commercial Bank before the merger could be allowed. The Milimani Commercial Court is expected to deliver its ruling today on whether a suit filed by Industrial Plant EA Ltd against the bank can stand or be struck out. Industrial Plant had argued that if no sufficient security was in place, then the court should stop the planned merger. Earlier, the Plant’s advocates rejected a written undertaking by Stanbic. "The court is dealing with a colossal claim of KSh26 billion and not papers as presented by the defendant," argued Oseko. Oseko argued that the value of the claim was high and a sufficient security was necessary. Industrial Plant (EA) Ltd had argued that the intended merger was illegal.


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