Malé, Maldives – Bank of Maldives (BML) illegally seized the bank accounts of Kings Capital, which allegedly extorted money from many people, and the company will have the right to sue for compensation, the Civil Court ruled on January 24, 2023.
Kings Capital Holdings, a local investment and foreign-exchanging trading firm owned by former lawmaker Alhan Fahmy, filed a case against the Bank of Maldives (BML) in an attempt to unfreeze its bank accounts with Maldives Civil Court in March 2022.
Bank of Maldives took the initiative to block all transactions and freeze the accounts of Kings Capital Holdings alleging that the trading firm was running a sophisticated Ponzi scheme.
Kings Capital sued BML to determine that the deactivation of the accounts was unlawful and also that it would be entitled to recover damages.
The civil court ruled that the account was deactivated a day after BML asked the company to explain why large amounts of money were being deposited into the account. Under the Money Laundering Act, the bank does not have the power to seize the account itself while suspicious money can only be seized under a court order.
According to the judgment, the bank has the right not to accept the money. But the bank has no right to withhold any money in the account under the agreement, the ruling said.
The judgment stated that Kings could sue Bank of Maldives for damages for the 14-day period in which its funds were held, as the Contract Act provides that a breach of contract is liable for consequential damages.
Judge Mariam Waheed ruled that the company would have the right to sue for damages as Bank of Maldives deactivated the account and withheld the money illegally.
With the seizure of the accounts, many of those who invested money in the company’s scheme have not received any money since.
Kings shareholders and Alhan have been charged with money laundering and a criminal investigation is underway. Police recently raided Alhan’s office and seized his phone.
Following the Civil Courts verdict, Bank of Maldives revealed that they will be appealing the courts decision.
BML said yesterday that it is appealing the case because it hopes that the court will take into account the judicial and legal points that were not taken into account in the decision of the Civil Court.