Companies

Imperial Bank says CBK knew of loan advances to auditors

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Armed Police at an Imperial Bank branch. FILE PHOTO | NMG

Directors of the collapsed Imperial Bank claim that the industry regulator was aware of loans disbursed to its external auditors, PKF Kenya, and that the credit facilities were in no way an inducement.

They say that the Board reviewed and approved the Sh500 million loan requests to PKF partners, and informed the Central Bank of Kenya (CBK) afterwards.

The CBK has claimed in a recovery suit filed against Imperial’s directors and shareholders that the loans were disbursed to East Africa Property Holdings, a firm owned by PKF Kenya partners, as inducement to cook books and conceal a Sh44.2 billion fraud scheme.

“The credit facility to the partners of PKF Kenya trading as East Africa Property Holdings was duly approved by the Board of directors of the bank, and duly notified to the CBK in keeping with the prudential guidelines,” Imperial Bank’s directors say.

READ: Imperial Bank owners offered auditors Sh500 million loans

“This averment by Imperial Bank (In Receivership), the KDIC and the CBK is made in bad faith, to insinuate that the facility was made to induce the said firm of accountants, which allegation is false and unfounded,” they add.

Imperial Bank’s receiver manager—the Kenya Deposit Insurance Corporation—filed a recovery suit against the lender’s directors and shareholders in October last year.