Transnational Bank faces property auction over Sh108m debt

Friday, August 30th, 2019 00:00 |
Justice. Photo/Courtesy

The Industrial Court in Mombasa has ordered movable assets of the Transnational Bank be auctioned over a debt of Sh108 million owed to former employees of Diani Reef Hotel.

Auctioneers yesterday camped at the bank’s City Hall Way branch in Nairobi but were informed that the legal officer was not around.

The matter, an old dispute initiated in 2007 in Mombasa, was later transferred to the Industrial Court through a ruling delivered at the High Court Mombasa, on March 25, 2013.

The 71 employees worked in various departments and were hired by the hotel on diverse dates, from as early as 1981.

In April 2003, when the facility was taken over by Spire Properties, the employees were owed terminal dues comprising gratuity, annual leave, notice pay and other dues amounting to Sh32.5 million.

R T Dunnet was appointed the receiver manager by the Transnational Bank before the hotel was purchased by Spire Properties (K) Limited in 2003.

Terminal benefits

The employees claimed that they were rendered jobless without terminal benefits and asked the court to grant them general damages.

The court finally ruled that the termination of the employees was irregular, unlawful and improper, and awarded them damages.

Court records indicate that Hotel Span, which owned the Diani Reef at the time, did not file any response or participate in the proceedings in any way.

R T Dunnet and the bank, however, filed statements of defence where the former stated that he was appointed receiver manager and that Hotel Span had defaulted in repayment of loan which had been advanced by Transnational Bank. The matter dragged before court and Transnational Bank was finally ordered by decree on September 8, 2017, to pay the workers Sh108, 701, 623.

An auctioneer was commanded to sell by auction the bank’s assets and served the institution with a notice on August 21.

Movable assets

An official from the Fantasy Auctioneers George Muchiri yesterday clarified their intention was not to close the bank but to attach the movable assets including furniture and computers.

 The bank was first served in March but moved to the Court of Appeal where some conditions were set before the final judgement this month.

Muchiri said they would go back to court to seek orders for police to assist them to access the bank and execute orders.

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