Imperial Bank directors have claimed that senior Central Bank of Kenya (CBK) officials who were complicit in fraudulent transactions that led to the collapse of the lender are now an obstacle to its re-structuring and revival.
The directors Tuesday told Parliament that CBK officers are obstructing effective investigations into fraud that precipitated the collapse of the bank, and are now pressing for its liquidation to cover their involvement in the scam.
CBK appointed the Kenya Deposit Insurance Corporation (KDIC) as receivers of the bank in October 2015 for a period of 12 months following its collapse amid revelations that up to Sh34 billion of shareholders’ deposits were missing.
“It is plainly obvious that such complicit officers cannot be entrusted with the investigations which, if properly conducted, would unearth and expose their fraudulent dealings in cahoots with former group managing director Abdulmalek Jamohamed and senior employees of the bank,” said Imperial bank chairman Alnashir Popat in his address to MPs.
He said the conflict of interest impedes the objectivity of overseeing the investigations, meaning that the culprits might never be brought to book.
“These officers have effectively manipulated the receivership process so as to deflect attention and protect themselves,” he told the National Assembly Finance committee.
CBK governor Patrick Njoroge has, however, consistently accused Imperial Bank directors of refusing to co-operate with the regulator on investigations and revival efforts.
Dr Njoroge said Imperial Bank directors’ attitude is unlike that of their Chase Bank counterparts, whose co-operation with the regulator helped to realise speedy re-opening of the bank.
One of the key conditions that the CBK has set for Imperial Bank shareholders is that they should inject at least Sh20 billion capital to plug the gap left by the massive fraud said to have been perpetuated by the late Janmohamed.
The directors said the CBK had pre-judged the shareholders as being complicit in the illegal activities at the bank and had, without offering explanations, ignored all their proposals for a full recovery plan.
“CBK has essentially rejected all shareholders’ proposals on the recovery plan yet demanded that the shareholders inject a sum of Sh20 billion,” said Mr Popat.
He claimed that the regulator had treated formal expressions of interest in the bank from more than six local and foreign lenders and investment houses in a similar manner.
“In its desire is to close it and conceal its officers’ complicity in the fraud perpetrated against the bank, CBK simply ignored these genuine and substantive expressions of interest,” he said.
Nominated MP Oburu Odinga sought to know whether having an independent arbitrator would help fast-track reopening of the bank.
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Credit: Business Daily
