CENTRAL BANK WANTS IMPERIAL BANK LIQUIDATED.

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Central Bank of Kenya Governor Dr Patrick Njoroge.
BY SAM ALFAN.

The Central Bank of Kenya and Kenya Deposit Insurance Corporation wants a decision stopping them from liquidating Imperial Bank overturned.

Justice George Odunga had delivered a ruling on November 4, 2016 barring CBK and the insurance umbrella from liquidating the Bank until the relevant legal provisions are complied with.

Being dissatisfied with the orders, CBK and KDIC filed a notice of appeal on November 17, 2016.

Judge Odunga had stopped them from engaging in any exclusion and transfer of the bank or any of the assets in any manner other than as prescribed under the applicable laws.

The shareholders had filed a judicial review application in February this year after CBK allegedly set off the process of transfer, which includes selling the banks’ assets and eventually liquidating it.

“I compel CBK, KDIC and all of their agents to furnish the stakeholders of IBL with information relating to the process of receivership as long as that information is not prejudicial to the investigations being undertaken,” said Odunga.

The stakeholders of IBL, Imaran Ltd, Raynolds and Company Ltd, East African Motors (sales and services Ltd), Momentum Holding Ltd, Abdulmal Investments Ltd and Kenblest Company had sued CBK and KDIC.

NIC Bank, Kenya Commercial Bank, Diamond Trust Bank and Owino Ogweno Josphine were the interested parties in the petition dated February 9, this year.

The stakeholders had sought orders prohibiting CBK and its agents from transferring Imperial Bank assets until both parties had met and agreed on the recovery plan for the reopening of the bank.

They also wanted the court to quash CBK’s decision published in a press release dated December 2, last year, through which it commenced a transfer and exclusion process to the benefit of the interested parties in violation of the stakeholders’ rights to fair administrative action.

The stakeholders also wanted CBK to be compelled to provide the relevant information to the applicants, relating to the bank that they may use in the recovery plan.

According to the shareholders, Imperial Bank’s former group managing director Abdulmalek Janmohamed passed away suddenly on September 15, last year, when they allegedly learned that he had been making illegal disbursements from the bank together with other senior officials and external accomplices.

They had claimed in their petition that three CBK and one KDIC employee played a major role in concealing the fraud that saw the bank lose an estimated Sh38 billion.

Justice Odunga said CBK and KDIC, while carrying out their functions, must observe provisions and procedural rules laid down in the law.

After the judgement, the two agencies issued a press release stating they will continue the processes of liquidating the bank.

According to them, the judge had found them to have acted within the requirements of the law, claiming that the bank’s shareholders had failed to provide adequate assurance to implement a proposal that would enable the lifting of the receivership and reopening of the bank.

Imperial Bank shareholders claim in a court case that CBK and KDIC demanded that they inject Sh20 billion into the bank as a precondition for them to participate in restructuring of the bank.

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