Hope for depositors as CBK puts Imperial Bank on sale

Imperial Bank was placed under receivership in October 2015.[Photo: file, Standard]

Depositors at Imperial Bank Limited (IBL) have welcomed news that the bank will be sold off within 12 months, saving them from the gruesome pain of liquidation that historically takes years.

Central Bank of Kenya Friday put out a notice to sell the lender, inviting former shareholders of the bank and other strategic investors interested in the failed lender.

“Mindful of the concerns by depositors and the need for the process to be fully credible to potential strategic investors in order to maximise the value for depositors, the entire process is anticipated to be about 48 weeks,” CBK Governor Patrick Njoroge said in the notice.

Mohamood Khambiye, chairman of the IBL Depositors Lobby Group, said yesterday they welcomed the move but urged the regulator to reduce the time it would take to conclude the matter.

“The people whose money is stuck in the lender are not small depositors but people who had money and are now broke. These are the Italians who have settled at the Coast, people who have put their life savings in the bank and industries,” he said.

On social media, some depositors complained that the decision to sell the lender instead of winding it up had taken too long.


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“If only this process could’ve been started 21 months ago…(why wasn’t it?), then it would’ve been resolved by now! Depositors are so desperate and for many this resolution will be to (sic) late to pick up the pieces of our lives devastated by this closure,” Nelmarie Sanders said on the lobby group’s Facebook page.

Mr Khambiye said depositors are appealing to the CBK to also release some funds while the transactions are ongoing to lift the burden of the shareholders.

“If it takes another year, we will have spent a whole three years without the money. They had promised us access to 40 per cent but if they can give us 20 to 25 per cent while shortening the period we will be OK,” he said.

CBK has had frosty relations with IBL shareholders, with whom it is locked in several court cases over the fate of the lender, including a bid to freeze their assets.

The view of the shareholders was not known at the time of going to press but the court tussles cast a shadow on how CBK will handle them through the sale.

“The formal process will commence with an invitation for expressions of interest from potential strategic investors, and the bank’s shareholders if they so wish, in taking an interest in the bank,” CBK said in the statement.

Sources close to shareholders, however, said the sale is an about-turn by the regulator and confirms what they knew all along – that the lender could be salvaged.


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“During the receivership under NIC they were able to get Sh5 billion in loan repayments, which stresses the point that it has always had the potential for recovery,” said the source.

CBK insisted that shareholders played a part in the lender’s collapse in October 2015 after its former boss Abdulmalek Janmohamed siphoned almost Sh34 billion from the bank through shady deals with fishmonger W E Tilley.

Curiously, the regulator said the sale is meant to safeguard the interest of depositors, creditors and the wider public interest, and did not mention the shareholders.

It, however, said it would continue to engage all stakeholders concerning the next steps in the resolution of IBL’s receivership as permitted by the law.

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