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Collapsed Dubai Bank gives up its Nairobi headquarters offices

Collapsed Dubai Bank has given up its Nairobi headquarters offices, allowing owners of the ICEA building where it was housed to let out the space.

The lender, which was in August last year placed under receivership by the Central Bank of Kenya (CBK), has since 1988 operated its main office on the ground floor of the ICEA Building along Kenyatta Avenue.

Jomo Kenyatta University of Agriculture and Technology (JKUAT), the owner of the 30-storey building, have now rented the office to a Korean-based electronics dealer.

“Our lease of 25 years came to an end sometime in October and it was not renewed,” Dubai Bank founder and chairman Hassan Zubeidi told the Business Daily in a telephone interview.

The closed Dubai Bank head office branch furniture has been removed and the new owner, who took over the space late last month, has begun renovations.

The statutory manager, Kenya Deposit Insurance Corporation (KDIC), carted away Dubai Bank’s documents late last month before the space was leased out.

ICEA Building houses companies such KenolKobil, Standard Investment Bank, National Bank and Kestrel Capital, AAR Healthcare, Acacia Medical Centre and Hamilton Harrison & Mathews among several others.

The iconic property was owned by the family of former CBK Governor Philip Ndegwa before JKUAT bought it for approximately Sh1.85 billion mid-last year.

“If we are allowed to re-open the bank, we shall do so in another location. This will either be in Upperhill or within the city centre where we have some property,” said Mr Zubeidi.

The CBK shut down Dubai Bank citing serious cases of parallel banking, a mountain of unsecured loans that were not being serviced, interference with client accounts and overstating of cash balances.

The bank, which had four branches, had by the time of its closure advanced Sh4.1 billion in loans, 98 per cent of which had not been serviced for more than three months, raising fears that more than half the amount would not be paid.

The CBK, in court documents, further claimed that Mr Zubeidi used depositors’ funds to guarantee his private companies some Sh1.6 billion and in the process amassed substantial wealth irregularly.

The lender had 7,700 depositors at the time of its closure holding about Sh1.4 billion.

A call for customers holding Sh100,000 and below to come forward and claim their money only yielded 561 responses, raising eyebrows about the bank’s operations.

SOURCE: Business Daily