BY SAM ALFAN.
Former directors of collapsed Imperial Bank Limited have lost an application seeking the summoning of senior officials of Central Bank of Kenya to court to explain the move to place the lender under receivership in 2015.
Justice Alfred Mabeya dismissed the application saying the evidence of CBK Governor Patrick Njoroge, his deputy Sheila Mbijiwe and the CBK board chairman Mohamed Nyaoga will not in any way assist in the case before him.
The Judge said the issue of placement of the bank under receivership was not an issue before the court. He added that the receivership matter had been dealt with in another matter.
“Since there are no specific claims sought against CBK, my view is that to summon the intended witnesses, will not further the cause of justice. It’ll not assist the court at arriving at a just decision. The upshot is that the application is found to lack merit and is dismissed,” the judge ruled.
The bank sought to examine the senior officials on the issues relating to the process undertaken by CBK to place it under receivership.
Through senior counsel Ahmednasir Abdulahi said the three are relevant and indispensable to the just and effectual determination of the matter.
Janco Investments ltd, Gulshan Janmohamed, Mehdi Janmohamed, Naeem Shah, James Kaburu said the appearance was necessary for purposes of enabling the court to arrive at a just determination of the dispute.
Ahmednassir told the court that the entire process of placing IBL under statutory management was unlawful, a conspiracy by the Governor and his Deputy, for extraneous purposes that are best known to them.
The lender got into trouble following claims of malpractices following the death of its co-founder and long-serving group managing director Abdulmalek Janmohamed on September 15, 2015. There are claims that he was running a parallel bank within the lender.
The senior counsel argued that in October 2015, when CBK purported to place IBL in the hands of the Kenya Deposit Insurance Corporation, Njoroge was out of the country in Peru.
“On October 13, 2015, CBK had no duly constituted board of directors and thus was incapable of exercising its powers under the Banking Act of Kenya, Chapter 488 of the laws of Kenya and CBK Act of Kenya, chapter 491 of the laws of Kenya.
It is material for the court to know who made the decision “, Ahmednasir said.
He added that Imperial Bank was placed under statutory management of the KDIC was unlawful orders or instructions of the Deputy Governor Sheila M’Mbijjiwe.
“Besides the Bank being in a solid financial position, having a healthy loan book with no history of financial crisis, CBK purported to appoint KDIC as the Receiver of the Bank.
In supporting affidavit filed by Salim Janmohamed, the eleven told the court that it is imperative that both Governor Njoroge and her Deputy Sheila be summoned to shed light on the decision-making process leading to the closure of the Bank and who pulled the trigger in light of the absence of the Governor from the country and why and who closed the Bank if CBK was without board of directors?
They also want the trio to shed light on how many members of the board of directors were in office on the material date and whether the board of directors of CBK had a quorum.
The former directors want the court to be informed whether the Deputy Governor, on her own motion, placed the Bank under receivership or whether the decision was made jointly.
“We want the three to shed light on whether the chairman of the Board of Directors Mohammed Nyaoga called a board meeting deliberated on the issues and passed resolutions calling for the placing of the Bank under statutory management,” Ahmednasir said in the application.
They also seek to know whether the former Treasury CS who was in the UK, called Governor Njoroge and told not to place the Bank under Receivership.