The High Court has frozen the acquisition of Spire Bank by Equity Bank over the struggling Bank’s failure to explain the plight of employees.
Employment and Labour Relations Court Justice Maureen Onyango ruled that the deal should wait until such a time when Spire Bank and employees will reach an agreement.
“That in the meantime, status quo as of the date of this court’s orders to be maintained until either party agrees on suitable undertaking, and is signed by the respondent (union),” She ruled.
Read: New Hurdle in Spire-Equity Deal Over Resignation In Board
The case will be mentioned on October 31, a period in which the court believes the two sides will have arrived at a workable idea.
Banking, Insurance and Finance Union (BIFU) filed a court case protesting the move by equity to acquire Spire Bank, arguing that the workers were not involved in the process despite being key stakeholders.
BIFU alleged the existence of a collective bargaining agreement between the union and the bank, whose validity was not recognized by the lender, compelling BIFU to seek legal redress for the matter.
The court’s decision is another blow to the purchase of Spire Bank, which has witnessed cracks in the board culminating in a series of resignations in a bid to halt the process.
Read: Equity Bank Agrees To Buy Cash-strapped Spire Bank
Wycliffe Osoro, David Wachira, Christine Sabwa and Benson Milai have since resigned and failed to ratify the last stages of the acquisition process.
However, the only remaining process is regulatory approvals from the Competition Authority of Kenya (CAK) and the Central Bank of Kenya (CBK).
Once completed, the acquisition deal is expected to see Equity inherit a rich customer base with over 1.3 billion in deposits from Spire Bank customers.
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