Court extends orders stopping CMA from probing Imperial Bank owners
Imperial Bank branch in Mombasa. PHOTO | FILE
The High Court has temporarily extended orders stopping the Capital Markets Authority (CMA) from investigating owners of Imperial Bank over the Sh2 billion corporate bond issued last year.
The owners of the failed bank have up to seven days to file a reply to the markets authority’s submissions which want the stay orders granted mid last month lifted.
“The interim order restricting the CMA from subjecting the directors to purported enforcement has been extended to July 13 when the matter comes up for a mention for further directions as regards the written submission,” the directors’ lawyer Njoroge Regeru said.
CMA summoned directors Alnashir Popat, Omurembe Iyadi, Jinit Shah, Anwar Hajee, Hanit Somji, Vishnu Dhutia, Eric Bengi, Christopher Diaz, and Mukesh Patel in December to investigate the failed Sh2 billion bond.
The directors however moved to court to stop the market regulator from conducting the probe citing inaccessibility of crucial documents and claiming they were being targeted selectively for prosecution, while other parties involved in the bond issue have been left untouched.
The bank’s directors also said that CMA was acting as the accuser, prosecutor and judge in its own cause as it is an interested party in the bond issue.
The directors argued that the bank had floated to the public a Sh2 billion corporate bond whose issuance was duly vetted and approved by the CMA while Dyer & Blair Investment Bank Ltd was appointed the transaction adviser for the cash call.
In a replying affidavit, CMA countered that its mandate was to carry out administrative actions against the banks owners to safeguard the capital markets as well as protect investors’ interests.
The regulator argued that directors of the collapsed Imperial Bank Ltd do not warrant the temporary reprieve and that the application was made in bad faith to frustrate the inquiry.
CMA said the nine shareholders listed in the suit had been assured they will be given a fair hearing but had instead been postponing summons to appear before them since the beginning of the year.
“The truth of the matter is that the Directors have consistently sought to delay and frustrate the administrative process being undertaken by the Authority. The Authority has accorded them several adjournments to avail them sufficient time to prepare and has continued to indicate that due consideration will be given to requests for postponement depending on the circumstances,” CMA CEO Paul Muthaura said.
The directors were first called to appear in January which was moved to May, before they requested it to be moved to June when they made an application to move it to July.
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