NAIROBI, Kenya, Jun 23 – Shareholders of the troubled Imperial Bank Ltd, now in receivership, have accused the Central Bank of Kenya (CBK) of rushing the liquidation of the bank.
In a statement the shareholders say the action by CBK to dispose the bank’s assets to NIC Bank as a move to bury evidence of CBK’s own role in the saga.
They said the move is not transparent and has not involved all players.
“International best practice dictates that liquidation be the final option pursued after all other recovery efforts have been exhausted. The recovery of the bank, in a structured, transparent and all-inclusive manner, with openly and competitively sourced partners is always the first and preferable option,” the shareholders said.
NIC Bank was Wednesday appointed to take over most of IBL branches and staff on behalf of the Kenya Deposit Insurance Corporation.
NIC Bank would also pay Imperial Bank depositors up to Sh1.5 million subject to the courts lifting suspension of payments.
“The solution, based on CBK’s announcement is detrimental to the large depositors as it provides access to Sh2.5 million of the deposit and 40 percent of the remaining balance, which is far below the recoverable value of the assets of the bank,” the statement reads.
The shareholders also refuted claims that they have failed to provide adequate assurances to implement a proposal that would enable the prompt reopening of the bank and resumption of normal activities for its customers.
According to the shareholders the insistence by CBK that this money be injected within 48 hours and without an opportunity to conduct any form of due diligence is unfair and prejudicial.
“The shareholders were summoned to a meeting on Wednesday June 15 2016, and once again presented to the CBK and KDIC a further proposal. This proposal included the participation of a listed third party bank that would carry out a rights issue to buy the good bank. The shareholders offered to underwrite the rights issues to facilitate the transaction, which would likely yield a pay out of upwards of 75 percent excluding any contribution from recoveries. The repeated assertions by CBK that the shareholders have failed to provide a credible revival plan is therefore highly misleading,” the shareholders complained.