Twist in Sh146 billion ruling against Bank of Tanzania subsidiary

TANZANIA Dar es Salaam:

Local company, Coast Textiles Limited, has protested the Solicitor General’s application to block its Sh145.9 billion court award, saying the move is aimed at frustrating implementation of the court order.

The High Court had in May, 2022 ordered the Director of Deposit Insurance Board (DIB), a subsidiary within the Bank of Tanzania (BoT), Isack Kihwili, to pay Sh145.9 billion to Coasts Textile in execution of court decree issued in 2015 against FBME.

DIB director was appointed by the BoT as liquidator of FBME Bank.

When the case was mentioned yesterday, the Solicitor General, through Principal State Attorney Jackline Kinyasi, requested the High Court to temporarily put the order on hold because the company ought to have followed the procedure provided under the Government Proceedings Act to execute the court decree.

Coast Textiles sought court intervention after FBME Bank, whose operations were taken over by the BoT, failed to implement the judgment given by Judge Aloysius Mujulizi in 2015.

For the last 24 years, the company has been engaged in a legal battle against FBME Bank Limited, which was later taken over by the BoT after being implicated in money-laundering crimes.

FBME Bank had been granted an overdraft facility by Trust Bank, through its branch in Kenya but the company claimed the amount, about $600,000, was never credited to Coast Textile suppliers in India.

Following a protracted legal wrangle, the High Court on December 31, 2015 directed the Governor of the BoT to attach accounts belonging to FBME Bank in execution of the issued by judge Mululizi over payment in question.

When the case came for a mention yesterday, Mr Joseph Rutabingwa who represented Coast Textile told Judge Amir Mruma that the DIB director, Mr Kihwili has to show cause why he should not be sent to prison for failure to pay the amount in execution of court order.

He was reacting to a request by Principal State Attorney Jacline Kinyasi, who told the court that though they were not opposed to the judgment against them, the company ought to have followed the procedure provided for under Government Proceedings Act to enforce the court order.

The lawyer from the Solicitor General’s Office explained that under the Government Proceedings Act, Coast Textiles Limited was required to file a certificate to the Ministry of Finance, through the Attorney General, to effect to the payments in question since Mr Kihwili is a public servant.

Responding to the request, Mr Rutabingwa submitted that the decision given by Judge Mruma on May 20, 2022 was final and by that time Mr Kihwili had already filed an affidavit to explain why he had not executed the court’s decree and a decision was given in such respect.