Depositors lobby pushes for Imperial Bank cash recovery

A charity school in Kitengela is amongst the 1,700 large accountholders that have formed a pressure group to hasten recovery of their cash as their future hangs by the thread.

Sunrise of Africa School director Corrine Colvin told the Business Daily that its funds had been wired into the school’s account the day before the lender was put under receivership.

The institution depends largely on donor funding from local and foreign well-wishers to run its academic programmes.
It is among the more than 9,000 large account holders at Imperial Bank, whose deposit balances are yet to be paid out in full.

“We received our biggest donation of $56,000 (Sh5.7 million) just the day before the bank was put under receivership. Some of our teachers now want to leave due to difficulties in paying them and we have been unable to pay the school’s food bills for the past three months,” said Ms Colvin.

READ: Mystery of Imperial Bank savers who have defied calls to collect their cash

Also read: Fresh bond terms slapped on officials of Imperial Bank

“It has become very difficult to go on with normal operations under these circumstances.”

The school was started in 2008 with an initial student population of eight, but has now grown to host more than 300.

It offers partial and full scholarships to more than half of the students coming from poor households and also runs a school feeding programme.

The Kenya Deposit Insurance Corporation (KDIC) has been making payments to account holders up to a maximum of Sh1 million each subject to account and identity verifications, through Kenya Commercial Bank and DTB Group. Central Bank of Kenya (CBK) had set aside Sh8 billion to cater for these payments.

Lobyy group

According to CBK, payments totalling Sh6.8 billion had been made by the end of last month, with 39,860 depositors (equivalent to 80 per cent of depositors) paid in full or having not claimed their balances of less than Sh10,000.

The 1,746 of the bank’s depositors who are yet to fully access their savings — mainly business owners — have now come together to form a lobby group, asking to be included in future negotiations between the central bank and the shareholders of Imperial Bank over the fate of the lender.

Mahmoud Khambiye, director at IT retailer Personal Systems Computers Ltd, said the group is yet to seek to be enjoined in the court cases arising from the bank’s collapse, and is instead concentrating on getting back the locked in funds as soon as possible.

“We are still servicing loans borrowed from the bank at a time they have held our capital, meaning that we have to borrow around to keep our businesses going,” said Mr Khambiye.

Imperial Bank’s collapse in October last year caught many by surprise, coming as the bank looked to the outside world to be in good financial health.

The bank was closed on the day it was to list a Sh2 billion bond — approved by the Capital Markets Authority — and which was set to pay a fixed rate of 15 per cent on the Nairobi bourse.

The bank’s long-serving managing director Abdulmalek Janmohamed who died in September last year, is said to have fraudulently transferred Sh34 billion from the bank to his companies and bank accounts between 2002 and 2015.

Consequently, Imperial Bank’s head of credit, Naeem Shah, chief finance officer James Kaburu and the directors of W.E. Tilley Limited, the Nairobi-based fishmonger said to have confessed to receiving a third of the looted cash, have been charged in court on five counts of theft.
[email protected]