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The shareholders want details on a plan to re-open the bank/CFM BUSINESS

Kenya

Imperial Bank shareholders complain kept in the dark

The shareholders want details on a plan to re-open the bank/CFM BUSINESS

The shareholders want details on a plan to re-open the bank/CFM BUSINESS

NAIROBI, Kenya, Jan 12 – Imperial Bank Limited (IBL) shareholders have faulted the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) for sidelining them in goings on at the bank, which is currently under receivership.

Imperial Bank Chairman Alnashir Popat says there has been no formal response from both entities on a solution to bring the bank back to business.

Popat says the shareholders want to work towards re-opening the bank and are prepared to protect their rights in the courts.

The shareholders claim that they have been left in the dark in all matters, citing that they were not consulted when the CBK announced a payment plan for IBL depositors.

IBL depositors were able to access their deposits in December last year though KCB and DTB for those with less than Sh1 million in deposits. The rest will access their money by March 2016.

READ: Imperial Bank depositors to access their money by Christmas

“We just saw the press release that morning, we were not consulted; we don’t know what CBK and KDIC want to do with the bank, we are in the dark, we want the bank to re-open soon,” the chairman stated.

According to the shareholders, the events leading up to placement of the bank under receivership are as follows:

On September 15, 2015, IBL Managing Director Abdul Janmohammed died of a cardiac arrest and Naeem Shah (Head of Credit) together with James Kaburu (Chief Financial Officer) were appointed acting Managing Director and Deputy Managing Director respectively the following day.

A week later, the acting MD and Deputy MD revealed to some of the directors that the late Group MD was involved with fraudulent disbursements which had been hidden from the board.

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Later on, the board after a series of meetings, formally appointed FTI Consulting to conduct an in-depth investigation into the allegations.

“FTI consulting reported back to the board and confirmed that a number of irregular transactions had been undertaken by the late Group MD and his accomplices without the Knowledge of the non-executive directors. The report also indicates that some CBK staff together with the external auditors PKF Kenya were also involved in the scandal,” the chairman claimed.

The board thereafter nominated three directors together with David Morris, FTI Consulting team leader to report the findings to the Deputy Governor of CBK.

The CBK later appointed Kenya Deposit Insurance Corporation as the receiver manager of the bank for a period of 12 months.

IBL directors and shareholders were instructed to refrain from speaking to any stakeholders including depositors and staff.

“Shareholders presented to CBK and KDIC a document comprising a recovery plan for the bank. No formal response is issued; a revised recovery plan was presented again to CBK and KDIC. A further recovery plan was also made to the CBK and KDIC. Still no formal response,” Popat added.

He further revealed that following the receivership, the CBK Governor Patrick Njoroge came up with mandatory conditions that include shareholders injecting Sh20 billion capital to the bank which he termed as unrealistic since no forensic report had been done on how much the bank needed to bounce back.

“The shareholders are willing to inject capital after due diligence of the status of the bank and how much is needed to bring it back up as well as a legal framework on how the money will be injected,” Popat said.

He urged Governor Njoroge to engage and work with them together with the restructuring experts to re-open the bank.

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“The shareholders and non-executive directors of the bank for whom I am their spokesperson deeply sympathise with the plight and frustration of all depositors, bondholders, and all other affected stakeholders. We want to ensure that the truth about what happened is revealed and we intend to work together with all the stakeholders to re-open the bank within the shortest time possible,” Popat concluded.

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