NAIROBI, Kenya, Oct 5 – The High Court has restrained the former directors of Imperial Bank from disposing off their assets until a suit filed by Central Bank of Kenya seeking to recover Sh45 billion that is alleged to have been stolen from the institution through fraud is determined.
Justice Francis Tuiyot says that the assets should remain in the hands of the directors during the dependency of this case.
He cautioned that whoever interferes with assets will do so on their own risk.
The court observed that apprehensions have been raised by Central Bank of Kenya, that directors are hurriedly transferring the assets and shares while the matter is still pending before the court.
CBK is seeking a freeze order on all assets and shares owned by the former directors who are accused of fraud.
“The court made the remarks on fears raised by CBK and 132 depositors who said some shares owned by the directors in companies cited in the suit were being transferred inconsistently… with the assurance made in court, they will have themselves to blame,” the judge said.
Two lawyers claimed that they were aware that shares transfers were being effected as the proceedings were in progress.
“As we speak the apprehension that the defendants may act in inappropriately is real,” lawyer Philip Murgor said.
Lawyers representing the directors were forced to make an undertaking that there would be “no interference” with the properties till the case is heard and determined.
Murgor sought the order against the transfer of shares, also asking the court to compel the directors “not to diminish or undervalue the properties in question.”
“The assets to be frozen are a total of 42 companies in which the directors are shareholders, it has come to our knowledge that some assets are being disposed of,” Murgor said.
He said the disposition of these assets may thwart the very attempts aimed at enabling the recovery of the money which depositors lost.
On Wednesday, the directors opposed an application seeking to enjoin 132 depositors in the suit but lawyers submitted that “the money to be recovered belonged to the depositors.”
“The basic principle of fairness and obedience to the rule of natural justice dictates that they be party to these proceedings,” Murgor argued.
“We seek an order that can protect the assets so that they can remain in their hands, but disable them from disposing the assets, and that their value is not diminished.”
Imperial Bank of Kenya, Kenya Deposit Insurance Corporation and Central Bank of Kenya lodged the new case claiming that the directors slept on the job and allowed fraud to reign supreme sending the bank into liquidity.
The directors have however challenged the case stating that such an allegation “cannot form a basis for the freezing of their assets some of which they did not directly acquire through Imperial Bank.”
The case will be heard on October 17, 18 and 19.