CBK, Mombasa tycoon settle Sh1bn Imperial Bank deposit case

Lawyers for both Mr Doshi and CBK told the court on Thursday that that the case had been settled and consented to its withdrawal.

“The case is withdrawn with no orders as to costs,” the High Court, which adopted the consent, ruled as the case file was marked as withdrawn.

Mr Doshi had challenged the appointment of Kenya Deposit Insurance Corporation (KDIC) as the liquidator of the bank, claiming that it was done illegally and irregularly.

In his case documents, Mr Doshi argued that, under Section 53 (2) of the Kenya Deposit Insurance (KDI) Act, CBK is authorised to appoint the liquidator only during the receivership of the bank.

“When the defendant appointed KDIC as the liquidator of Imperial Bank, the period of receivership had long expired. The appointment of KDIC as liquidator was therefore illegal and unlawful because it was not done in the course of receivership,” argued the businessman. The appointment was made on December 8, 2021.

According to the plaintiff, under the KDI Act, CBK could only appoint a liquidator on recommendation of the KDIC, which he claims was not done, thus rendering the appointment illegal and unlawful.

“The defendant deliberately appointed KDIC as the liquidator of Imperial Bank without following the law, with malicious aim of winding up the bank without regard to the law and procedure,” the suit documents stated.

The businessman was seeking a declaration that, on December 8, 2021, when CBK purported to appoint KDIC as the liquidator of Imperial Bank, the term of the corporation had already lapsed and the bank was no longer in receivership.

He was also seeking a declaration that the appointment of KDIC as liquidator of the bank through a Gazette Notice was illegal, null and void and had no legal effect.

In his affidavit, Mr Doshi argued that, upon being served with the case documents, CBK, through the liquidation agent, quickly published notices in the newspapers indicating intention to pay out deposits to protected depositors.

“The publication of the notices is a clear indication that CBK through the liquidation agent is keen on proceeding with and executing the process so that in the event the court finds the appointment of the liquidator is illegal, the process shall have been completed with nothing to reverse,” argued Mr Doshi.

The businessman also said that the urgency with which CBK was moving to liquidate the bank is intended to evade questions that have been raised on the legality of the appointment of the liquidator.

CBK had argued that the receivership of Imperial Bank and the moratorium declared had not expired as at December 8 2021 when it was placed under liquidation.

It argued that on December 7, 2021, CBK received from KDIC, the receiver of the bank (then in receivership), a recommendation that the bank be placed under liquidation.

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