Development financier IDB Capital has been enjoined in a suit filed by Imperial Bank’s receiver managers to recover Sh34 billion from firms linked to the lender’s scam.
IDB is seeking to free assets tied down by the court case as they were used as security for loans.
IDB Capital had asked Justice Fred Ochieng to enjoin Imperial in the suit and lift an order freezing the transfer of assets owned by two companies – fish firm Victorian Delight and mineral water processor Aqualite Ltd.
Processing plants owned by the two firms were used as security to borrow funds from IDB Capital, which now wants to take steps for recovery as Victorian Delight and Aqualite have defaulted.
Justice Ochieng has however declined to lift the freeze, saying the move would risk depleting assets that could be used to refund depositors should the defendants be found guilty of aiding the Imperial Bank heist.
“If I were to lift the injunction at this stage, IDB Capital would realise the securities. At this moment in time it is not known if the defendants will be found liable for unjust enrichment. I find that if the debentures secured were not properly secured, IDB Capital would be seriously prejudiced,” Justice Ochieng ruled.
“I have come to the conclusion that it is in the best interests of IDB Capital and depositors to enjoin IDB Capital in the suit.”
IDB’s agreement with Victorian Delight and Aqualite allowed the development lender to appoint receivers to manage the two firms in the event that they were unable to repay the loan.
Imperial Bank’s receiver manager —the Kenya Deposit Insurance Corporation (KDIC)— has sued Victorian Delight, Aqualite, nine other firms and nine businessmen seeking to recover Sh34 billion that was looted from depositors.
The KDIC believes that senior Imperial Bank officials and directors issued fraudulent loans to the firms and businessmen as part of a scheme to loot depositors’ funds.
KDIC is seeking to recover Sh44.9 billion from the lender’s shareholders in a separate case.