Ongoing discussions about the revival of Imperial Bank is not only taking too long but apparently is also taking places in the dark as depositors are complaining of lack of access to relevant information. Depositors are asking Kenya Depositors Insurance Corporation(KIDC) for more involvement in the process to enable make informed decision on the way forward.
‘‘We are in the dark over ongoing discussions between the regulator and KCB Group over acquisition of Imperial Bank,’’ depositors are now saying.
A lobby group that represented a section of Imperial Bank depositors had been calling for speedy investigations into its collapse, noting that ongoing investigations have taken too long to bear any fruit.
The tea agency, which has Sh 2.9 billion in deposits at the collapsed lender, in a petition filed last month accused the Central Bank of Kenya of failing to disclose due diligence and steps taken to protect their interests and not giving updates on the financial position of the bank.
KTDA has listed Kenya Depositors Insurance Corporation (KDIC) and Central Bank of Kenya (CBK) as respondents.
“Declining, refusing and or otherwise failing to disclose due diligence and steps taken to protect the plaintiff’s interest during the receivership period,” reads one of the issues identified by KTDA as breach by KDIC.
Imperial Bank was placed under receivership on October 13, 2015, after the CBK learnt of fraud, which milked the lender of Sh 34 billion but the Information on the progress has remained scanty.
The silence occasioned by lack of information has reached a level where one of the depositors, Kenya Tea Development Agency (KTDA) has moved to court seeking access to information.
The agency wants the High Court to compel KDIC to give it access to information that would help it ascertain the true and current position of the bank. It further wants to be involved in ongoing discussions with KCB.
The tea agency further says the regulator has failed to ensure the discussions with KCB Bank or any other interested bidders are concluded timely to safeguard the interest of the depositors and other stakeholders.
KTDA lawyer Mwangi Kibicho told Smart Company that his client is not opposed to the ongoing negotiations but stressed that they want access to more information.
The High Court on September 26 allowed a request to extend Imperial Bank’s receivership until a case by the KTDA is determined.
The Central Bank of Kenya (CBK) in a statement on Thursday announcing the extension of receivership, noted that it would provide further details to stakeholders as soon as a binding offer by KCB Bank to acquire the lender’s assets has been fully assessed.
But KTDA in the documents filed in court says CBK has failed to give it any information on the financial position of Imperial Bank, which it argues is in breach of statutory duty.
Imperial Bank was placed under receivership on October 13, 2015, after the CBK learnt of fraud, which milked the lender of Sh 34 billion but the Information on the progress has remained scanty.
The collapsed Imperial Bank saga sucked in Deputy Chief Justice Philomena Mwilu in a dramatic case that left her long legal career hanging on a thread.
Director of Public Prosecutions Noordin Haji said that Justice Mwilu accepted cash gifts, obtained execution of a security belonging to Imperial Bank by impersonation and failed to pay taxes.
Imperial Bank chairman Alnashir Popat, when he appeared before a parliamentary committee, claimed CBK officers were obstructing effective investigations into the mega fraud that precipitated collapse of the bank and were pressing for its liquidation to cover their tracks.
However, KDIC chief executive Mohamud Mohamud says the fact that the bank is set to reopen proves the allegations about the institution were wrong.