Kenya’s bank deposits protection fund will foot the bill for the ongoing forensic audit into the collapse of Imperial Bank, the agency said on Thursday.
The Kenya Deposit Insurance Corporation (KDIC) says its willingness to foot the bill is because the agency plans to use the findings to help in recovery of looted cash and payment of account holders in the collapsed lender.
The costs payable to Washington DC-based FTI Consulting, which is auditing books of the collapsed lender, are estimated at more than Sh1 billion.
FTI Consulting has been on the audit job for the past seven months — following the surprise closure of the mid-sized lender on October 13, 2015.
“The findings will inform recovery. It is a worthwhile investment,” said KDIC acting chief executive Mohamud Ahmed Mohamud. “This is the first time we’re doing a forensic audit after receivership.”
He added that the audit would be complete by end of this month.
Mr Mohamud, however, declined to reveal the size of the bill or how much has been paid out so far to FTI Consulting.
KDIC, previously known as the Deposit Protection Fund Board, is currently managing 16 banks in liquidation, and another three lenders in receivership — Dubai Bank, Imperial Bank and Chase Bank.
Mr Mohamud said Dubai Bank, currently under receivership, would now be liquidated after the High Court last week threw out a petition seeking to stop winding up of the lender.
KCB Bank is acting as the statutory manager for Chase Bank on behalf of KDIC.
The deposit protection agency is facing a princely bill of about £11 million (Sh1.5 billion) in professional fees for the last seven-month period, according to leaked contract documents for the Kenyan project seen by the Business Daily.
The deposit underwriter had a fund worth Sh62 billion as at March 2016, accrued from levying commercial banks and deposit-taking micro financiers a premium assessed at 0.15 per cent of total deposits held.
All deposits held in banks and deposit-taking microfinance banks are insured to the tune of Sh100,000 by per deposit account.
FTI Consulting, a specialised forensic accounting consultancy, charges £338,000 in fees per week broken down as £155,000 (Sh22.7 million) for on-site investigation, £45,000 (Sh6.5 million) in other expenses, a retainer of £100,000 (14.6 million), and £38,000 (Sh5.5 million) for strategic communications, according to a contract for the Imperial Bank audit.
Source: Business Daily