KTDA loses petition to join suit filed by collapsed Imperial Bank owners
Workers at a tea processing factory in Nyeri. Tea farmers’ umbrella body, KTDA, says it made four deposits totalling Sh2.9 billion at Imperial Bank. PHOTO | FILE
The Kenya Tea Development Agency (KTDA) has lost its bid to join a suit Imperial Bank owners filed to stop the lender’s liquidation.
High Court judge George Odunga has dismissed an application filed by the tea farmers umbrella body seeking to join the case filed against the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC).
Justice Odunga held that KTDA failed to explain why exactly it should be enjoined in the suit as required by law. The judge held that the agency ought to have disclosed what it intended to place before the court that would make its presence in the suit necessary.
KTDA in its application said it made four deposits totalling Sh2.9 billion at Imperial Bank, and that the outcome of the case will directly have an impact on its funds that are currently stuck at the bank.
“For a party to be joined to the proceedings the applicant ought to disclose to the court how he or she is directly affected by disclosing upfront its legal position in the matter and what it intends to place before the court that makes his case distinct from the case presented by the other parties to the proceedings. In other words there ought to be material disclosure of the intended case,” the judge ruled.
The CBK and KDIC had opposed KTDA’s joinder, arguing that it would encourage other depositors to file suits hence slow down plans to rescue Imperial Bank from the jaws of total collapse.
READ: Tea farmers’ Sh2.3bn deposits at risk with Imperial collapse
The troubled lender’s shareholders have sued the CBK and KDIC to stop them from taking any steps towards dissolution of Imperial Bank until their revival plan has been considered. They have enjoined the Kenya Commercial Bank and Diamond Trust Bank in the suit.
KCB and DTB had been tasked with releasing up to Sh1 million to depositors before the Mombasa High Court stopped the process following another suit filed by billionaire businessman Ashok Doshi and his wife Amit who have Sh1.1 billion stuck at the bank. They have challenged the Sh1 million payouts.
Justice Odunga held in his ruling that depositors interests are catered for by the KDIC hence it will argue the case to protect KTDA and other savers.
“Whereas to the said general rule there may be exceptions, the onus lies on the particular depos itor who contends that there are exceptional circumstances to prove so,” the judge added.
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