CBK tasks Imperial Bank shareholders to present bankable plan to avoid assets sale
The Central Bank of Kenya has challenged Imperial Bank shareholders to present a credible recovery plan to aid in the reopening of the bank before April 2017.
This as the banking regulator announced that it will continue with its plans to sell off part of the bank’s assets in an effort of ensuring all depositors get their money.
The Central Bank is relying on a court ruling lifting the suspension of its plans to conduct a due diligence on the bank.
NIC Bank was in June appointed the assets and liabilities consultant for Imperial Bank, to conduct the due diligence on the bank as well as assume part of the bank’s assets to aid in the payment of depositors.
“KDIC and CBK will continue the processes that were suspended by the Court, and in particular, NIC’s due diligence and contract review, which is expected to lead to structured access to the remaining deposits” CBK said in a statement.
Through the agreement, NIC Bank will also be able to absorb former Imperial Bank employees.
By the time the suspension order was issued, Imperial Bank depositors had withdrawn over Sh3 billion as NIC Bank processed payments of up to Sh1.5 million per customer.
KDIC had in December engaged KCB and DTB to pay customers up to Sh1 million.
Imperial Bank shareholders have in the past opposed the move arguing it amounted to the systemic stripping of the bank’s assets, a position they hold equates to liquidating the bank with no possibility of having it reopen.
The banking regulator however hit out at the shareholders for failing to provide what it terms as a workable recovery plan.
“The final proposal by the shareholders on June 15, 2016, was rejected, in which the shareholders withdrew their offer to inject Sh10 billion and replaced it with a proposal to raise Sh5 billion by way of a rights issue,” the Bank said.
CBK said it remained open to a credible and tangible recovery plan that will see Sh45 billion injected into the bank as part of the revised fraud amount lost without legal action being taken against the shareholders and directors.
KDIC in September moved to court seeking orders to recover the amount by freezing and seizing known assets of the shareholders.
Additional Reporting by Ephraim Mugo
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