The High Court has halted Equity Bank’s acquisition of Spire Bank due to a disagreement over the fate of the troubled lender’s employees.
Judge Maureen Onyango of the Employment and Labour Relations Court ruled that the lenders should maintain the status quo until a deal with the employees is reached.
Employees of Spire Bank filed a lawsuit to stop the acquisition through the Bank Insurance and Finance Union (BIGU), claiming their employer had kept them in the dark about the deal.
Equity, which has a Sh1.3 trillion asset base, will acquire Sh945 million in loan assets and Sh1.3 billion in deposit liabilities from the struggling Spire Bank.
Mwalimu Sacco, Spire Bank’s majority shareholder, will pay Equity Sh1.7 billion to cover liabilities.
“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),” Justice Onyango said.
The case will be heard on October 31 to see if the union and the lender have reached an agreement.
