Imperial Bank in row with CBK over extended timelines

Fresh row has emerged between shareholders of the defunct Imperial Bank Limited Central Bank of Kenya and Kenya Deposit Insurance Corporation (KDIC) over the intended receivership extension

According to shareholders of the bank that was put under receivership in October 2015 for what the banking regulator termed as unsafe banking, CBK has extended the receivership due on 19thSeptember 2017 by another 12 months to enable them run an expression of interest process with a view to identifying investors to acquire the bank.

In a protest letter to the regulator’s lawyer dated 20thJuly 2017, shareholders explains that after the lapse of the twelve-month statutory period of receivership, the same was extended via statute for six months and then via consent on two occasions for a further six months, which period finally lapses on the 19th of September 2017.

”There exist various litigations, the pursuance of which will either affect the ongoing efforts to resolve the receivership, or the rights of respective parties to the litigation would be prejudiced by a premature and poorly structured consensual extension. The execution of the EOI process against the backdrop of pending litigation by and against the bank is unlikely to be successful,” stated the letter

The letter further questions CBK’s intension of withholding the bank’s financial status report claiming the action is what stalled the expression of interest (EOI) process.

However, CBK, has termed the accusations as false and saying that shareholders are fully aware of the extension.

Indeed in a letter from the regulator’s lawyer Murgor and Murgor advocates in response to another one dated 13th July by Wandabwa advocates representing shareholders show that the matter was communicated to the complaint who has since moved to court

A press statement from CBK dated 23rd June also clearly indicate time lines to be followed in outsourcing the new investor.

The CBK lawyer told the Star that shareholders are simply trying to retract from the previous agreement

The matter will be mentioned in court today.

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