Dodoma. The government has allayed the concerns of FBME Bank depositors over payment doubts following a recent ruling in the UK.
The depositors fear the ruling could further delay the refund.
Attorney General Adelardus Kilangi told the National Assembly yesterday that the ruling has nothing to do and will not affect the payments to depositors.
“The case was filed by shareholders against investigators and will not affect anything in the payment of depositors,” said Prof Kilangi as he provided additional responses following the query.
In the basic question, Mr Hashim Jaku Ayub (Zanzibar House of Representatives - CCM) wanted to know the status of the bank and when all the depositors would be paid.
He was concerned by the delays of payment to depositors while the government said the money was available.
He said FBME money was in Dutch Bank and wondered when it will come to Tanzania and refund the depositors.
“My concern is that this is taking too long to mature. People are dying and we are not sure if the delays will be compensated. Some people were saving for pilgrimage and are now stuck. A lot of Zanzibaris subscribed to the bank because of its services which were convenient and conformed to Islamic laws,” Mr Jaku told The Citizen in the Parliament grounds.
The government said that it has so far paid Sh2.4 billion as compensation for depositors of the liquidated FBME Bank.
The deputy minister for Finance and Planning, Dr Ashatu Kijaji, said the amount represent 55.9 per cent of the domestic and international banking depositors of the lender.
The Bank of Tanzania (BoT) revoked the licence of FBME Ltd in 2017 after it was accused of involvement in money laundering in the US.
The central bank appointed the Deposit Insurance Board to liquidate the bank.
“So far, about 83.3 per cent of the depositors who are in Tanzania have been paid,” said Dr Kijaji.
According to her, the customers residing in Tanzania needed a total of Sh2.88 billion while the insurance board paid Sh2.4 billion to them.
“The remaining customers include those who have not yet come out to claim their money,” she said.
The Deposit Insurance Board pays up to Sh1.5 million to a customer and those with more than Sh1.5 million will be paid the exceeding amount using the liquidation rules.
However, Dr Kijaji said their payment will depend on the amount to be collected from debt recovery and sale of the bank assets.
FBME shareholders won a UK High Court battle against investigators Nigel Brown, Alec Leighton and their respective companies.
The judgment of the case number CL-2016-000195, of which The Citizen has a copy, was delivered in the High Court of Justice Business and Property Courts of England and Wales Commercial Court (QBD) late June this year.
The UK court ruled out that two ex-Scotland Yard detectives breached their contract with FBME Bank by reporting “premature and speculative” money laundering allegations to US and Cypriot authorities.
Following claims, the Tanzanian regulator also put the bank under liquidation in 2017 and revoked its licence during the same year.
“I conclude that as regards some, indeed most, of the material the conclusions reached by Mr Brown were premature and speculative and accordingly could not satisfy the Go test,” Lady Justice Sara Cockerill said in reference to the UK legal doctrine that stipulates a mere allegation isn’t sufficient to justify a disclosure in the public interest.
The owners of the liquidated FBME Bank, which was headquartered in Tanzania but operated predominantly in Cyprus, sued Brown and Leighton, claiming that they violated their contract by reporting the alleged criminal activity, which included money laundering and terrorism financing.
The ruling forces the pair to turn over any confidential information they hold on the bank to its owners Ayoub-Farid Saab and Fadi Michel Saab, and identify who they gave the material to.
The investigators were also prohibited from making any further unauthorised disclosures.