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Kenya Power recovers Sh34m from Imperial

AGM

Kenya Power shareholders follow proceedings at a past AGM. FILE PHOTO | NMG

Kenya Power #ticker:KPLC has recovered Sh34.1 million from Imperial Bank as part of approved payments by the Central Bank of Kenya (CBK) following the lender’s collapse in October 2015.

The receipt of the funds, which the NSE-listed electricity distributor discloses in its latest annual report for the financial year to last June, leaves the firm with Sh288.3 million stuck in the failed bank.

This huge amount of inaccessible cash ranks Kenya Power among large depositors who risk losing tens of millions of shillings in the collapsed lender which is up for sale.

“Included in cash and bank is an amount of Sh288.28 million deposited in Imperial Bank Limited which was placed under receivership in 2015,” Kenya Power says in its report.

“During the year, a recovery of Sh34.15 million was made. The rest of the balance is fully provided for.”

Kenya Power says it did not have any funds held in Chase Bank, which was placed under receivership in April 2016 after an unexplained loss of billions of shillings at the mid-sized lender.

Imperial Bank was placed under statutory management after a multi-billion shilling fraud was revealed, with the lender’s top executives and directors implicated.

Its collapse sent shock waves among depositors, with those holding large sums staring at hefty losses.

The CBK in June 2016 appointed NIC Bank #ticker:NIC as a consultant for Imperial Bank with the key task of separating the “good bank” from the “bad bank” on a legal arrangement technically referred to as “exclusion and transfer process.”

READ: SBM gets regulator nod to acquire Chase Bank

The arrangement saw NIC process payments to depositors and collect loan repayments which came to an end in May 2017.

NIC reported that it had made disbursements worth Sh10.78 billion to more than 5,500 customers of the lender and collected Sh5 billion from borrowers in the period.
Imperial Bank’s collapse has seen Kenya Power cut its short-term deposits in local lenders.

As at June 2017, the firm had recalled all its Sh2 billion deposit from KCB Group #ticker:KCB and reduced its holdings in Co-op Bank #ticker:COOP significantly from Sh1.8 billion in 2016 to close the period under review at Sh225.1 million.

The power firm’s deposits at Housing Finance #ticker:HFCK however increased from Sh14.4 million to Sh371.1 million.