Market News

Law firm wants CBK held liable for billions held in fallen banks

Depositors of collapsed Imperial Bank demand their dues last year. FILE PHOTO | NMG
Depositors of collapsed Imperial Bank demand their dues last year. FILE PHOTO | NMG 

A Kenyan law firm says depositors of collapsed banks should be immediately compensated and the Central Bank of Kenya (CBK) held liable for failing to safeguard public funds.

Commercial, international capital and financial markets litigation firm MMC Africa Law said CBK had failed to punish own officials who colluded with directors and top management officials of failed banks as well as directors.

“None of the directors of the collapsed banks has been successfully prosecuted and convicted. This fortifies the view that CBK has been part of the problem and not the solution. It is time CBK was held accountable,” said MMC Africa Law senior partner and Team Leader Edward Muriu.

The statement came days after CBK promised to float bids for purchase of Imperial Bank in the next three weeks thereby enabling account holders to access cash.

The bank is under receivership.

CBK is currently scrutinising bids received for the planned sale of a majority stake at the troubled Chase Bank which has since seen its operations resume under supervision of KCB #ticker:KCB.

MMC further accused CBK of deliberately withholding a forensic audit report prepared by American Firm FTI Consulting on Imperial believed to have revealed improprieties by the bank directors and managers.

“For instance, there are claims that one of the CBK’s auditors for Imperial Bank was a business partner to the bank’s managing director.

“What does CBK have to hide? Are they trashing their own commissioned report in an attempt to cover up their own negligence?” posed Mr Muriu.