Companies

Imperial Bank directors blame CMA for approving Sh2bn bond

Collapsed Imperial Bank directors have shifted blame to the capital markets regulator for approving a Sh2 billion bond that the lender issued two months before being placed under receivership.

Imperial Bank’s directors hold that the Capital Markets Authority (CMA) reviewed and approved the information memorandum that highlighted technical aspects of the bond. They add that the document was prepared by an advisory team assisted by former executives of the bank — Naeem Shah and James Kaburu.

The directors now insist that the regulator must accept a portion of blame for the document that mis-stated facts about Imperial Bank’s true financial standing.

The CMA is pursuing enforcement proceedings against Imperial Bank’s former directors for alleged negligence in the run up to the lender’s Sh2 billion bond issued in August last year. The regulator claims Imperial Bank’s directors failed in their duty to oversee management of the lender.

But the Imperial Bank directors have obtained a court order barring the Capital Markets Tribunal from determining why enforcement proceedings should not be commenced against them.

The directors add that the CMA has already found them guilty before investigating the bond issue to finality hence the enforcement proceedings are unfair to them.