It never rains but pours for FDH Bank, as their legal battle with Maranatha Girls Academy has resurfaced and could dent the image of the bank.
According to a court document from the High Court in Blantyre that was signed on April 25 by the Registrar and served on FDH Bank Limited and Maranatha Girls Academy, the bank’s bosses have been ordered to appear before the court to explain why they are holding the court in contempt by disobeying orders given by the court on September 27, 2013 and January 6, 2014 following a delayed legal battle with Maranatha Girls Academy Limited.
The court documents show that the four bosses from FDH Bank: Managing Director Eric Ouattara, Deputy Managing Director William Mpinganjira, Head of Credit and Rehabilitation and Recoveries Manager Arthur Yapuwa and Joseph Khonje, should appear before the court on 18 May to justify their actions.
Some of the prominent legal experts are of the view that if the four are found guilty of contempt of court they risk being fined or given custodial sentence.
Maranatha Girls Academy’s lawyer said they have indeed served them with the notice.
Maranatha at first asked FDH Bank Holdings Chief Executive Officer, Thom Mpinganjira, to answer contempt charges.
The school has since changed the legal mind, saying Mpinganjira belongs to the Holdings unlike the four who are for FDH Bank Limited, in this case involved in the legal battle with Maranatha Girls Academy and not the Holdings.
“The four are holding this court in contempt by blatantly and contemptuously disobeying an order given by this court on September 27, 2013 and January 6, 2014, wherein an injunction was granted restraining the Respondent [FDH Bank] either by itself, its servants or agents from realising security in title number South Lunzu 7/45 in the city of Blantyre until the determination of this matter or a further order of the court,” reads part of the court notice to the four.
The court battle between the two entities started in 2013, when the bank advertised for sale of the school for its failure to settle a loan that Maranatha got from the bank but in turn the school sued FDH Bank for loss of business.
At first Maranatha Girls Academy Limited was awarded about K785 million but in his ruling in April last year, Judge Kenyatta Nyirenda slashed the figure to K392 million and other costs after the Supreme Court determination was made on the matter.
Nyirenda ordered FDH Bank to pay Maranatha Girls Academy K392 million for the bank’s failure to give the school three months statutory notice when it advertised in newspapers on July 25, 2012 that it would sell Maranatha Girls Academy Limited.
In April, sheriffs pounced on FDH Bank Umoyo House Branch and confiscated computers and a printer, forcing the bank to close for some hours but FDH Bank obtained a stay order stopping any seizure of its property.