CBK tells Imperial Bank owners to deposit Sh10bn pledge

Imperial Bank chairman Alnashir Popat (second left) and other directors at a Press briefing by shareholders of the collapsed bank on January 12, 2016. PHOTO | FILE
Imperial Bank chairman Alnashir Popat (second left) and other directors at a Press briefing by shareholders of the collapsed bank on January 12, 2016. PHOTO | FILE 

The Central Bank of Kenya (CBK) has asked Imperial Bank shareholders to deposit Sh10 billion as a pre-condition for opening dialogue on their pledge for re-opening the lender.

Shareholders of the bank had at a press briefing held a week ago said they are willing to inject Sh10 billion fresh capital into the collapsed bank to allow for its re-opening.

They had accused the CBK of failing to respond to their proposal, and instead started paying out depositors.

“We are very open to real genuine proposals to re-open the bank. There is an account here in the CBK, if you are serious put the money there then we can discuss,” said CBK Governor Patrick Njoroge at a press briefing on Thursday.

The governor disclosed that the regulator has paid out nearly Sh6 billion to depositors of the collapsed bank.

He said he had been waiting on the shareholders, who he referred to as “people with means,” to honour their pledge made soon after the closure of the bank in October, in vain.

The sudden death of the former Imperial Bank chief executive Abdulmalek Janmohamed exposed theft of customers’ deposits to the tune of Sh34 billion that had been going on for a decade.

The CBK has been demanding the shareholders bear a heavier burden in the re-capitalisation needed for re-opening of the lender in fulfilment of their fiduciary duty to the public.

The recapitalisation plan is to be supported by the conversion of some of the big customers’ deposits into shares. The CBK said it would make a decision on whether to strike off external auditors of the bank, PKF from the list of institutions approved to audit commercial banks once investigations on Imperial Bank’s operations are concluded.

PKF had served as auditors of the bank for the period in which the massive fraud is said to have been executed.

“The auditors did not raise red flags when auditing Imperial – the CBK can decide to strike off an auditor but first we need to be sure what we are protecting,” said the governor.

Shareholders of the bank have also threatened to take the auditors to court for professional negligence. The fate of Imperial Bank will be known in March when the regulator promised to give details on how the bulk depositors with the lender will access their cash.

“The plan has to be sustainable – we won’t throw our weight behind a plan that we don’t believe can keep the bank open,” said Mr Njoroge.

Beginning December the CBK has been paying out cash of up to Sh1 million to depositors of the bank in a move that would have fully cleared claims of 44,300 savers with the bank.

The governor disclosed the Kenya Deposit Insurance Corporation had received 17,136 claims from depositors of whom 15,059 had been paid to the value of Sh5.9 billion.

More than half of the depositors, 51 per cent, were said to be holding Sh5,000 and below in the ill-fated bank.