Central Bank Of Kenya(CBK) Extends Imperial Bank’s Receivership Status

The Central Bank of Kenya has extended the receivership period of Imperial Bank for another six months.

The regulator said the extension will allow the Kenya Insurance Deposit Corporation to advise on an appropriate resolution strategy.

“The Central Bank of Kenya hereby extends the appointment of KDIC as the receiver of Imperial Bank Limited for a further six months from October 13, 2016,” CBK said yesterday in a statement.

“KDIC will maintain the management, control and conduct of the affairs and business of the institution and exercise all the powers on the institution to the exclusion of its board of directors.”

It’s now a year since the CBK appointed KDIC to assume the management and control of Imperial Bank.

Last week, the CBK sued Imperial Bank directors, seeking to freeze assets worth Sh42 billion held in more than 40 companies. The assets were stolen through a well orchestrated scheme, organised by the late Imperial Bank founder and managing director Abdulmalek Janmohamed.

The CBK has sought an order to compel the bank directors and shareholders to pay back Sh2.7 billion, allegedly given to them fraudulently as dividends.

The CBK, Imperial Bank and KDIC decided to go after the directors of the bank on suspicion they engaged in fraud and breached the fiduciary duty to depositors.

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Through lawyers James Gachoka and Philip Murgor, the CBK, Imperial Bank and receiver KDIC have sued Alnashir Popat, Anwar Hajee, Jinit Shah, Hanif Mohammed Amiralisomji, Mukesh Kumar Patel, Vishnu Dhutia, the estate of Abdulmalek Janmohammed, Eric Gitonga, Omurembe Iyadi, Christopher Angelo Diaz and eight others.

The court was told forensic investigations conducted by FTI consulting revealed multiple breaches of fiduciary duty by directors, leading to massive and well-orchestrated fraud which resulted in loss of Sh42 billion assets and depositors’ funds.

US forensic auditor FTI Consulting and Banking Fraud Investigations Department of the Kenya Police have been leading investigations to unearth those behind the alleged 13-year loot from around 2003 – arguably the country’s largest financial scam ever.

“The investigation is largely complete and now we are working with prosecution entities and other agencies to cross this bridge safely,” Njoroge said on September 21. “The evidence will help in the recovery of assets and bring those responsible to task.”


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