A court has cancelled the warrants of attachment and sale of movable property owned by Guardian Bank over a disputed debt of Sh196 million owed to four former shareholders of the defunct Guilders International Bank.
At the same time, Guardian yesterday pleaded with the Court of Appeal to stay execution of the High Court judgment in which the shareholders of Guilders were awarded a compensation of Sh196 million with a 12 per cent interest backdated to 2001.
Through lawyer Ochieng Oduol, Guardian also accused the former shareholders of exaggerating the disputed sums to Sh2.5 billion.
The lawyer said that, since the compensation amount had not been computed or ascertained by the court, it was irregular for the former shareholders of Guilders to claim that the outstanding debt is Sh2.5 billion.
Guilders had sought to attach the assets of Guardian in an attempt to execute the High Court judgment as the long-running legal battle between the two lenders persists. Mr Oduol said one of the companies that owned Guilders has since been dissolved.
While asking the court to stay execution of the judgement, the lender also questioned the financial capacity of the four companies that owned Guilders to refund the money in the event they lose the appeal. The companies are Shivali Investments Limited, Naval Holdings Limited, Ketty Investments Limited and Saaf Holdings Limited. They sold their 200,000 shares in 1999 when Guardian Bank took over Guilders.
In response, the former shareholders asked the court to order Guardian and its eight associates to deposit the sums in court pending the determination of the appeal.
On the issue of embellishing the amount, they said it is “a matter of splitting hairs because the trial court gave the decretal sum and the interest and how that interest was to be calculated”.
They said the litigation has been existing for over two decades and that Guardian has since made profits from the shares and securities that were transferred.
On the identity of the former shareholders, they said “that is a frivolous issue that should not be revisited”. They added that they are prejudiced as they lost shares, securities and the bank they were running. The ruling is set for June 9.