Moville is small island in the eastern caribbean

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Reference no: EM132256248

Moville is a small island in the eastern Caribbean which has a population of approximately 6,500 persons and only one bank, the National Bank of Moville (“NBM”). NBM is experiencing some legal woes with the Kardashka family. The Chairman of the Board of Directors of NBM and head of the Kardashka family is Robert Kardashka, a self-made billionaire who owns two of the four hotels in Moville. Robert does not have a university degree and has no experience in the banking industry. He was appointed as Chairman by his best friend, Ronald Drump, the then Prime Minister of Moville and has served in that capacity for the past ten (10) years.

During his time as Chairman, Robert has used his authority and influence to do a host of transactions. His first action as Chairman was to appoint his wife, Mrs. Kris Kardashka, as the Money Laundering Reporting Officer and the Money Laundering Compliance Officer of NBM based on her experience over the years as a housewife and manager of his home. Kris only had a primary school education and never received any training or certification in the financial services industry.

Robert also caused his elderly sister, Caitlyn, to mortgage her home for the sum of US$1 million, so that he could use the funds to start a restaurant business in 2010. At the time of the transaction, Caitlyn was eighty years old and was partly blind. NBM officials were not aware of this and did not meet with Caitlyn at the time. All of the documents were sent to Robert, who then brought them to Caitlyn for her to sign them. He then submitted the documents to NBM. The loan was approved. In the beginning, Robert would make the mortgage payments on Caitlyn’s behalf. However, after he found out that Caitlyn had left all her property to her son in her will, Robert stopped making the payments. The mortgage has therefore fallen into arrears and NBM is in the process of exercising its power of sale. The property is valued at US$2.5 million. It is Robert’s intention to purchase the property through one of his company’s K. Inc. Robert has therefore instructed NBM to limit its advertisement of the sale of the property to one advertisement in one newspaper. The sale of the property was advertised in ‘The Advocate” on February 20, 2018. The advertisement indicated that the property would be auctioned at a private auction on February 27, 2018. At the auction, only one bid was received in the sum of US$750,000. The bid was from K. Inc. NBM has accepted this bid. Roland has heard the news about the pending sale of his mother’s home and has commenced legal action against NBM.

Robert’s daughter, Kim, has a chequing account with NBM. On January 20, 2018, Kim discovered that a leaf in her cheque book was missing. On March 30, 2018 Kim received her statement from NBM and discovered that her signature was forged on a cheque dated January 30, 2018 in the sum of US$100,000. She reported the forgery to the bank. She now intends to sue the bank for conversion. Robert has demanded that NBM credit Kim’s account.

Kim’s sister, Kourtney has also had a run-in with NBM. She has drawn a cheque on NBM for US$5,000. The bank due to inadvertence refused to honour the cheque citing insufficient funds. Later, it was discovered that the bank made a mistake since the account had sufficient funds. Kourtney intends to sue the bank for defamation.

Robert is also incensed at NBM as NBM intends to close one of its branches in the rural areas in Moville. The building that houses the NBM branch that will be closed is owned by a company owned by Robert. NBM leases the building from this company. At the time NBM was unaware that Robert owned the company. Robert is fearful that if the branch closes he will not be able to get the property rented. He therefore intends to use his power as Chairman to prevent the closure.

In light of all these problems, NBM has decided to seek legal advice.

Using the IRAC method, how do i guide the bank?

Reference no: EM132256248

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