A decision by Central Bank of Kenya to sell off the assets of Imperial Bank has been overturned after disgruntled directors challenged the move.
The banks regulator on Tuesday announced that it had entered an agreement with Kenya Deposits Insurance Corporation and NIC Bank to effect the payment of Sh1.5 million to depositors.
“Subject to a due deligence and contract review and negotiations, KDIC will dispose of and NIC will assume a portion of the remaining cerified deposits with certain assets and liabilities,” Central bank announced.
Imoperial Bank directors told the court that the action by the regulator ultimately culminates to the liquidation of the bank.
Lawyer Andrew Wandabwa for the directors that unless the court intervenes that unreasonable decision will be at grave detriment and loss of his clients’ depositors, bondholders and employees.
“there is therefore a real, present and imminent risk that unless the application is heard without delay, the move will occasion irredeemable loss and damage to the depositors, creditors and bondholders and members of the public,” he told the court.
He thus urged the court that in the interest of equity and justice that the application be heard urgently and the order stopping the process of disposal be stopped.
The court agreeing with the bank issued orders barring the disposal of Imperial’s assets pending the hearing of the application filed by its directors.
The bank was also asked to serve the application to Central Bank and other interested parties in the suit.
Proceedings will resume tomorrow.