Imperial Bank shareholders have sued Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) and asked the High Court to jail their board members for failing to update the on the bank’s receivership status even though depositors continue to receive payments.
The shareholders, who filed a suit on February 14th, say the CBK and KDIC have ignored a court order issued last year compelling them to share details of Imperial Bank’s status and explore possible revival plans with all stakeholders.
Imperial’s shareholders have also raised concerns on the continued payment of some depositors through NIC Bank in exchange for assets, arguing that the move amounts to premature liquidation of the bank, which Justice George Odunga had barred. The judge, in his November ruling, ordered the CBK and the KDIC to engage shareholders and depositors with a view to reviving the lender that has remained under statutory management since October 2015.
The bank was taken over by the regulator after it was discovered that Ksh44.9 billion had been embezzled through fraud allegedly spearheaded by deceased managing director Abdulmalek Janmohammed. The KDIC has filed two suits against the shareholders seeking to recover the sum, arguing that as owners they participated in the siphoning of depositors’ savings.
It has also filed another suit against the family of Mr Janmohammed, a network of businessmen and companies used to channel depositors’ funds out of the bank. The shareholders now want CBK governor Patrick Njoroge, the regulator’s board of directors and their KDIC counterparts jailed.
“It is noteworthy that the contemplated transfer process to NIC Bank is what the court had barred. This honourable court should issue a 30- day notice to CBK board of directors and KDIC board of directors to personally attend court to show why contempt of court proceedings should not be commenced against them,” the shareholders say.
The CBK and KDIC are yet to respond to the suit.
“Despite the applicants herein requesting the respondents herein to avail to them the necessary and relevant information regarding the receivership and arrangements entered into with third parties, the respondents have refused to supply the applicants herein with the said information or even respond to the said correspondence,” adds Anwar Hajee, one of Imperial Bank’s shareholders.
Justice Odunga’s November judgment caused a standoff between the KDIC, depositors and shareholders who held contrasting interpretations. Shareholders claimed that the CBK had been barred from continuing with the release of deposits through NIC Bank while the receiver manager holds that the judge gave the deal a go-ahead.
The CBK board is chaired by Mohammed Nyaoga. It also has Ravi Ruparel, Nelius Kariuki, Samson Cherutich, Charity Selina Kisotu, Rachael Dzombo and Kamau Thugge as members. KDIC board CEO is Mahmoud Mohamed and also has Julius Kipng’etich, CBK governor Dr Njoroge, Mr Thugge, Attorney-General Githu Muigai, Nasim Devji, Jeremy Ngunze, and Samuel Kimani. (Business Daily)
[crp]
